EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0615149
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.
Eltek Pacific applied for a TCO in respect of certain sealed lead acid accumulators on 28 September 2006.
Instrument
TCO No 0615149 was made on 15 December 2006. It declares that those certain sealed lead acid 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. 0615149 is taken to have come into force on 28 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 Australian Parliament, addresses the need for a regulatory framework governing the importation of goods into Australia. One of its provisions, found in Part XVA, establishes a scheme under which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs. This legislative mechanism aims to provide relief on customs duties for specific goods by applying a lower rate, provided certain criteria are met. The introduction of TCOs is designed to facilitate trade by reducing the financial burden on importers of certain goods, thereby encouraging the import of these goods and potentially stimulating economic activity related to their use. The process for issuing a TCO involves an application by a person to the CEO, followed by a determination on whether the application meets the core criteria, such as the absence of substitutable goods produced in Australia at the time of application. The Tariff Concession Instrument No. 0615149 exemplifies this process, where a concession was granted on sealed lead acid accumulators, effectively reducing their duty rate from 5% to free.
Scope and Application
The Tariff Concession Instrument No. 0615149, which was made under the Customs Act 1901, applies to certain sealed lead acid accumulators. This legislation enables the Chief Executive Officer of Customs to grant tariff concessions on goods, provided that the application for such a concession meets the core criteria outlined in the Act. Specifically, the CEO must be satisfied that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. This concession provides a reduced rate of customs duty for these goods, effectively setting the duty at free instead of the general rate of 5%. The application by Eltek Pacific was accepted as meeting these criteria, and the instrument came into effect on 28 September 2006, the date the application was lodged. Importantly, the Tariff Concession Order does not disadvantage any person by affecting their rights as at the date of registration or imposing liabilities for actions taken before the order was registered. Importers, however, stand to benefit from this order by potentially applying for a refund of duty on goods imported since the effective date of the concession.
Key Provisions
The Tariff Concession Instrument No. 0615149, made under the Customs Act 1901, establishes a reduced rate of customs duty for certain sealed lead acid accumulators. Specifically, Section 269F (2) of the Act allows for an application to be made to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). If the application is deemed not to concern goods specified in Section 269SJ and meets the core criteria outlined in Section 269C, the CEO is required to issue a TCO. This order declares that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty rate of free instead of the general 5% rate.
The Act imposes certain obligations on the parties involved, particularly the CEO. Upon receiving an application for a TCO, the CEO must first verify that the application pertains to goods not listed in Section 269SJ and that it meets the core criteria set forth in Section 269C. If the CEO is satisfied that the application meets these requirements, they must issue a TCO as per Section 269P(3). Additionally, the CEO is mandated to publish a notice in the Gazette inviting submissions from any interested parties who might oppose the TCO, as per Section 269K(1). In this case, no submissions were received, and the TCO was issued accordingly.
In terms of potential breaches of the Act, there are no specific offences detailed in the Explanatory Statement. However, if the CEO fails to adhere to the requirements of Sections 269K(1) and 269C, it could be considered a non-compliance with the Act. The penalties for such non-compliance are not explicitly mentioned in the Explanatory Statement. Nevertheless, it is implied that any failure to comply with the Act's provisions could lead to legal consequences, including administrative or judicial actions to enforce compliance.