EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0613934
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.
Exide Australia Pty Ltd applied for a TCO in respect of certain motor vehicle battery casing steel moulds on 21 August 2006.
Instrument
TCO No 0613934 was made on 10 November 2006. It declares that those certain motor vehicle battery casing steel moulds 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. 0613934 is taken to have come into force on 21 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 Customs Act 1901, enacted by the Parliament of Australia, introduced a scheme under which Tariff Concession Orders (TCOs) can be made to provide lower rates of customs duty on certain goods. This mechanism aims to support Australian businesses by reducing the cost of importing specific goods, provided that no substitutable goods are produced in Australia. The instrument, Tariff Concession Instrument No. 0613934, was enacted to address the specific needs of Exide Australia Pty Ltd, which applied for a tariff concession on certain motor vehicle battery casing steel moulds. The Chief Executive Officer of Customs, satisfied that no substitutable goods were produced domestically, issued the TCO, which effectively lowered the duty rate from 5% to free, effective from the date of application, 21 August 2006. This measure benefits importers by potentially allowing them to claim refunds for duties paid on these goods since the commencement date.
Scope and Application
The Tariff Concession Instrument No. 0613934 applies to the specific motor vehicle battery casing steel moulds that Exide Australia Pty Ltd sought to have a tariff concession applied to, and it is made under the Customs Act 1901. This legislation is pertinent to the industry involved in the production or importation of these specific steel moulds. The application of the TCO is limited to these particular goods, which are subject to the Customs Tariff Act 1995, and it is applicable on a national level within Australia. The instrument does not extend to other goods or industries unless explicitly stated through a new TCO. It is important to note that the application for a tariff concession order is subject to the core criteria set out in the Customs Act, specifically under sections 269C and 269SJ, which outline the conditions under which such concessions can be granted. The CEO's decision is also influenced by the absence of any submissions opposing the concession, as required by section 269K(1) of the Act. The TCO itself does not affect the rights of any person as at the date of registration to their disadvantage nor impose any liabilities, ensuring that existing rights and duties are preserved unless a new concession is applied.
Key Provisions
The main operative sections of this legislation focus on the creation and application of Tariff Concession Orders (TCOs) as outlined in Part XVA of the Customs Act 1901 (section 269C). A Tariff Concession Order is issued by the Chief Executive Officer of Customs (CEO) when an application is made under section 269F and it is determined that no substitutable goods are produced in Australia on the day the application is lodged (section 269P(3)). The specific TCO No. 0613934 made on 10 November 2006 applies to certain motor vehicle battery casing steel moulds, declaring that these goods are subject to a zero duty rate, as opposed to the general rate of 5% (subsection 269P(3)).
Entities and individuals governed by this legislation, such as Exide Australia Pty Ltd, must ensure that their applications for TCOs are lodged in accordance with the Act. Specifically, they must ensure that the goods they apply for do not have substitutable counterparts produced in Australia, as per the definitions in sections 269D and 269E. The CEO has an obligation to assess the application against these criteria and, if satisfied, must issue a TCO. The CEO is also required to publish a notice in the Gazette (subsection 269K(1)) inviting submissions from any person who might have an interest in the application, although in this case, no submissions were received.
The legislation imposes certain obligations on the CEO, including the duty to evaluate TCO applications against the criteria set out in section 269C and to make a TCO if the application meets these criteria. Additionally, the CEO must ensure that a notice is published in the Gazette to allow for any objections or submissions from interested parties. The TCO does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person, as outlined in subsection 269S(1).
There are no specific offences or penalties outlined in this legislation for breach of the TCO provisions. However, any breaches of related provisions in the Customs Act 1901 or Customs Regulations 1993 could result in civil or criminal penalties. For example, fraudulent claims for tariff concessions could lead to penalties under the Crimes Act 1914 or the Crimes (Consequential Provisions) Act 1987, with potential maximum penalties for criminal offences depending on the specific circumstances of the breach. Civil penalties could also apply under other relevant legislation, such as the Commonwealth’s administrative penalties regime.