EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0608230
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Super Cheap Auto Pty Ltd applied for a TCO in respect of certain AC/DC generators on 10 May 2006.
Instrument
TCO No 0608230 was made on 28 July 2006. It declares that those certain AC/DC generators are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is free.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0608230 is taken to have come into force on 10 May 2006.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Tariff Concession Instrument No. 0608230 was enacted under the Customs Act 1901 to address the need for tariff concessions on certain goods, thereby promoting fair trade practices and economic efficiency. This instrument was introduced to provide relief from customs duties for specific goods that are not produced domestically, ensuring that Australian consumers and businesses have access to competitive pricing without being disadvantaged by higher import tariffs. The instrument was developed in response to an application by Super Cheap Auto Pty Ltd for tariff concessions on certain AC/DC generators, which was approved following a review by the Chief Executive Officer of Customs, who found that no substitutable goods were produced in Australia. This legislative measure aims to support the policy objective of facilitating smoother trade operations while preventing any adverse impact on existing rights or liabilities of non-Commonwealth entities.
The instrument was enacted by the relevant legislature, and its commencement date aligns with the date of the application, 10 May 2006, ensuring a seamless transition for affected parties. Importantly, the Tariff Concession Order does not affect the rights of non-Commonwealth entities as of the registration date, nor does it impose any liabilities on them for actions taken prior to the order's implementation. Instead, it benefits importers by potentially allowing them to seek duty refunds for goods imported since the order's effective date.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines the framework for Tariff Concession Orders (TCO) which can be made by the Chief Executive Officer of Customs (CEO). These TCOs apply to goods that attract a lower rate of customs duty and are granted following an application by a person who must demonstrate that no substitutable goods are produced in Australia in the ordinary course of business. This application process is subject to certain exclusions, such as goods specified in section 269SJ of the Act. If the CEO determines that the application meets the core criteria, a written order is made declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. The CEO is required to publish a notice in the Gazette inviting submissions against the TCO, although no submissions were received in the case of Tariff Concession Order No. 0608230, which came into force on 10 May 2006. This TCO does not affect the rights of persons other than the Commonwealth as at the date of registration and does not impose any liabilities on any person.
Key Provisions
The Tariff Concession Instrument No. 0608230, made under the Customs Act 1901, outlines the process and criteria for applying for a Tariff Concession Order (TCO) (s 269F). Specifically, it allows for a lower rate of customs duty on goods that are the subject of a TCO. The CEO must decide whether an application meets the core criteria, which include the absence of substitutable goods produced in Australia in the ordinary course of business (s 269C, s 269D, s 269E, s 269P(3)). If satisfied, the CEO issues a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty-free status for the goods (s 269P(3)). For the AC/DC generators in question, the TCO was issued on 28 July 2006, reducing the duty from 5% to free, effective from 10 May 2006 (s 269S(1)).
The Act imposes certain obligations on applicants and the CEO. An applicant must submit a valid application for a TCO (s 269F), and the CEO must assess whether the application meets the core criteria (s 269C). Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties (s 269K(1)). In this case, the CEO published such a notice but did not receive any submissions (s 269K(1)). These obligations ensure a transparent and fair process for evaluating tariff concessions.
Breaching the requirements set forth in the Customs Act 1901 may lead to civil or criminal consequences. For example, making false statements in an application for a TCO could be considered an offence, potentially leading to penalties under the Act. Although the specific penalties are not detailed in the explanatory statement, they may include fines or imprisonment, depending on the severity of the breach. The Act also provides for other administrative actions, such as the revocation of a TCO if it is found that the criteria for issuance were not met. Such consequences underscore the importance of compliance with the statutory requirements.