EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0613933
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.
Toshiba (Australia) Pty Ltd applied for a TCO in respect of certain accumulators on 22 August 2006.
Instrument
TCO No 0613933 was made on 10 November 2006. It declares that those certain accumulators 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. 0613933 is taken to have come into force on 22 August 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. 0613933, enacted in 2006 under the Customs Act 1901, addresses the issue of applying tariff concessions to specific goods that are not produced domestically, thereby facilitating their importation at a reduced duty rate. This instrument was developed in response to an application by Toshiba (Australia) Pty Ltd for tariff concessions on certain accumulators. The instrument was made to ensure that these goods could be imported duty-free, as no substitutable goods were being produced in Australia. The instrument was published in the Gazette, inviting public submissions, though none were received. The instrument became effective on the date the application was lodged, ensuring that it does not disadvantage any existing rights or impose new liabilities on importers or other stakeholders. The policy objective is to support the importation of goods that are not domestically produced, thereby enhancing market access and potentially reducing costs for consumers.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the application for Tariff Concession Orders (TCOs) by enabling the Chief Executive Officer of Customs (CEO) to apply lower rates of customs duty on certain goods. This scheme is designed to provide tariff relief on specific goods, provided the application meets the core criteria outlined in the Act. An applicant, such as Toshiba (Australia) Pty Ltd in this case, can apply for a TCO if the goods in question are not specified as excluded under section 269SJ of the Act and if, on the application date, no substitutable goods were produced in Australia in the ordinary course of business. The TCO No. 0613933, which was made on 10 November 2006, applies to certain accumulators and effectively makes them duty-free under item 50 of Schedule 4 to the Customs Tariff Act 1995. The CEO must ensure that a notice is published in the Gazette to invite submissions on the application, though in this instance, no submissions were received. The TCO is effective from the date the application was lodged, 22 August 2006, and does not affect existing rights or impose liabilities on any person other than the Commonwealth. Importers can benefit by applying for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The Tariff Concession Instrument No. 0613933 under the Customs Act 1901 provides a concessional tariff treatment for certain accumulators. Specifically, section 269F of the Act allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) regarding these goods. If the application meets the core criteria, as outlined in section 269C, the CEO is required to issue a TCO, which was done in this case on 10 November 2006. This TCO declares that the specified accumulators are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with the duty rate being free, as opposed to the general rate of 5%.
The obligations imposed on the parties by this legislation are centred around the application process and the criteria for issuing a TCO. Firstly, the Act mandates that the CEO must ensure that any application for a TCO is not in respect of goods specified in section 269SJ, which lists goods ineligible for a TCO. Upon determining that the application meets the core criteria, the CEO must make a written TCO order, as per section 269P(3). Additionally, as per subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may have reasons to oppose the TCO. In this instance, no submissions were received, facilitating the issuance of the TCO.
Under the Customs Act 1901, breaches of the conditions set forth in the TCO or failure to comply with the obligations imposed by the legislation may lead to various civil and criminal consequences. While the specific offences, penalties, or consequences are not detailed in the Explanatory Statement, the general provisions of the Act would apply. For instance, any person found to be intentionally evading customs duty could be subject to penalties as outlined in the Customs Act, which may include fines and imprisonment. The exact penalties would depend on the severity and intent behind the breach, as well as any relevant provisions within the broader legislative framework.