EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0617187
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.
Century Yuasa Batteries Pty Ltd applied for a TCO in respect of certain lead acid battery paste mixers on 14 September 2006.
Instrument
TCO No 0617187 was made on 8 December 2006. It declares that those certain lead acid battery paste mixers 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. 0617187 is taken to have come into force on 14 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, established a framework within which Tariff Concession Orders (TCOs) could be made by the Chief Executive Officer of Customs. This legislation was introduced to address the need for flexibility in tariff rates to support economic development and to encourage the import of specific goods that were not being produced domestically. The explanatory statement for Tariff Concession Instrument No. 0617187, which was made on 8 December 2006, highlights the process by which Century Yuasa Batteries Pty Ltd applied for a tariff concession on certain lead acid battery paste mixers. The CEO of Customs determined that no substitutable goods were produced in Australia, thus satisfying the core criteria for the concession, which resulted in a reduction of the duty rate from 5% to 0%. The instrument was published in the Gazette, inviting submissions but received none, indicating no objections to the concession. The TCO took effect from the date of the application, 14 September 2006, and provided benefits to importers by potentially allowing them to claim refunds for duties paid on imports of the specified goods from that date.
Scope and Application
The Tariff Concession Instrument No. 0617187 under the Customs Act 1901 applies to the specific goods—certain lead acid battery paste mixers—that are subject to the instrument. The Act applies to persons or entities seeking tariff concessions for goods that are not produced in Australia in the ordinary course of business, thereby qualifying them for a lower rate of customs duty. The instrument's jurisdictional reach extends to the Commonwealth level, as it is an instrument made under the Customs Act 1901, which is a federal statute. The application of the instrument is limited to goods that meet the criteria set out in the Act, particularly those that are not substitutable by Australian-produced goods and which are not specified in section 269SJ of the Act. The instrument does not disadvantage any person other than the Commonwealth and does not impose any liabilities on individuals or entities for actions taken prior to the instrument's effective date. Additionally, the instrument does not affect the rights of any person as at the date of registration.
Key Provisions
The main operative sections of this legislation (Tariff Concession Instrument No. 0617187) are sections 269C, 269F, 269P, and 269S of the Customs Act 1901, as well as the relevant provisions in the Customs Tariff Act 1995. Section 269F allows for the application for a Tariff Concession Order (TCO) by a person for goods, provided the goods are not specified in section 269SJ. If the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria (section 269C), a TCO is made, as per section 269P(3). The TCO declares that the goods are subject to a specific item in Schedule 4 of the Tariff, with a potentially lower rate of customs duty. In this case, the TCO No. 0617187 was made on 8 December 2006, declaring that certain lead acid battery paste mixers are subject to a 0% duty rate instead of the general 5% rate.
The Act imposes several obligations on the parties involved. The CEO must ensure that the application for a TCO is not in respect of goods specified in section 269SJ and must assess whether the application meets the core criteria (section 269C). This includes determining whether substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The CEO is also required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting submissions from any person who considers there are reasons why the TCO should not be made (subsection 269K(1)). Additionally, the TCO must 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 in respect of anything done or omitted to be done before the date of registration.
Breach of the provisions of the Customs Act 1901 can result in various offences, penalties, and consequences. For instance, section 245 of the Act outlines penalties for false or misleading statements made in the context of customs and excise matters. The maximum penalty for such offences can be significant, including substantial fines and imprisonment. Additionally, the imposition of a TCO that is later found to be invalid or improperly made could lead to legal challenges and the potential for the affected parties to seek remedies in court. The Act also provides for the possibility of duty refunds to importers under certain circumstances, as outlined in the Regulations (paragraph 126(1)(r)), which can be an important consequence for those who have already paid duties on goods that later benefit from a TCO.