EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0615134
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 powerboards on 22 September 2006.
Instrument
TCO No 0615134 was made on 8 December 2006. It declares that those certain powerboards 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 0%.
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. 0615134 is taken to have come into force on 22 September 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 Commonwealth Parliament, provides a framework for the regulation of customs duties and the management of international trade. The Act was introduced to address the need for a systematic approach to the imposition and management of customs duties, as well as the facilitation of trade. In 2006, Tariff Concession Instrument No. 0615134 was introduced under this Act to provide for a concession on customs duty for certain powerboards. This instrument was created in response to an application by Super Cheap Auto Pty Ltd, and it aims to provide tariff relief by reducing the customs duty on specified goods, thereby potentially lowering costs for importers and consumers. The policy objective of this concession is to support the importation of goods that are not produced domestically, thereby promoting competition and consumer choice in the market.
Scope and Application
The Customs Act 1901, as supplemented by the Tariff Concession Instrument No. 0615134, applies to the process of obtaining tariff concessions for specific goods imported into Australia. This legislative framework enables the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) to reduce the customs duty on certain goods. The Act applies to both individuals and entities that seek to import goods eligible for tariff concessions, provided the goods meet the core criteria outlined in the Act. These criteria include the condition that no substitutable goods are produced in Australia in the ordinary course of business. The geographic reach of this legislation is national, as it pertains to customs duties across Australia. Notably, certain goods specified in section 269SJ of the Act are excluded from eligibility for tariff concessions. The application of the Act can be further extended or restricted through subordinate instruments, although the primary text does not detail these mechanisms. The TCO does not affect existing rights or impose new liabilities on individuals or entities other than the Commonwealth, ensuring that only the rights of importers are beneficially affected by the tariff concessions.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0615134 under the Customs Act 1901 (section 269P(3)) mandate that if the Chief Executive Officer (CEO) of Customs is satisfied that an application for a Tariff Concession Order (TCO) meets the core criteria, the CEO must issue a written order declaring the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. Specifically, this instrument (section 269C) declares that certain powerboards are subject to item 50 of Schedule 4, with a concessional duty rate of 0% instead of the general rate of 5%.
The Act imposes several obligations on the parties involved. For example, section 269F of the Customs Act 1901 allows a person to apply for a TCO in respect of goods, provided these goods are not specified in section 269SJ, which lists those that cannot be subject to a TCO. The CEO must then determine if the application meets the core criteria, specifically if no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged (section 269C). If the CEO is satisfied that the application meets these criteria, a TCO must be issued. Furthermore, as per section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made.
In terms of offences and penalties, the Customs Act 1901 does not explicitly detail specific penalties for breaches relating to TCOs. However, non-compliance with customs regulations generally can lead to civil and criminal consequences. Civil penalties can include fines, and in more serious cases, criminal penalties can include imprisonment, reflecting the severity of the breach. The exact penalties would depend on the nature and extent of the breach, but they are designed to enforce compliance with customs laws and regulations.
Additionally, the Tariff Concession Instrument No. 0615134 ensures that the rights of a person, other than the Commonwealth, are not adversely affected by the TCO as at the date of registration. This means that any liabilities or disadvantages to individuals or entities other than the Commonwealth, in respect of actions taken before the TCO’s effective date, are not imposed by the order. Importers of the goods in question will benefit from the reduced duty rate and can apply for a refund of duty on goods imported since the day the TCO came into force (paragraph 126(1)(r) of the Regulations). This provision ensures that the legislative changes do not unfairly impact those who were operating under the previous duty regime before the TCO was enacted.