EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0617300
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 toolboxes on 19 September 2006.
Instrument
TCO No 0617300 was made on 8 December 2006. It declares that those certain toolboxes 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. 0617300 is taken to have come into force on 19 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, establishes a framework for the regulation of customs and excise duties. It allows for the implementation of Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs can reduce the rate of customs duty on certain goods. The Tariff Concession Instrument No. 0617300, made under this Act, was introduced to address a specific application by Super Cheap Auto Pty Ltd for a TCO on certain toolboxes. The primary objective of this legislation is to ensure that goods that are not produced in Australia and for which no substitutable goods are available domestically can benefit from reduced customs duties, thus promoting competitive pricing and potentially enhancing consumer access to affordable goods. The instrument was designed to come into effect on the date the application was lodged, ensuring that any rights or liabilities incurred before this date remain unaffected.
Scope and Application
The Customs Act 1901, through Part XVA, governs the process for making Tariff Concession Orders (TCOs) which apply lower rates of customs duty to specific goods. The Act applies to any individual or entity that seeks to apply for a TCO, particularly importers who stand to benefit from the tariff concessions. The scope of the Act extends to any goods that are not specified in section 269SJ of the Act as ineligible for tariff concessions. The Act has a national reach, operating under the Commonwealth jurisdiction, and affects all states and territories within Australia. The Act does not disadvantage any existing rights of persons other than the Commonwealth and does not impose liabilities on anyone for actions taken before the TCO comes into effect. The application and scope of the Act can be further defined or refined through subordinate instruments, which may provide additional criteria or procedures for TCO applications. For instance, the CEO of Customs must ensure that no substitutable goods are produced in Australia, as per sections 269C and 269D of the Act, before granting a TCO. The TCO No. 0617300, effective from 19 September 2006, demonstrates this process in action, reducing the duty rate for certain toolboxes from 5% to 0%.
Key Provisions
The Tariff Concession Order No. 0617300 under the Customs Act 1901 (section 269F) pertains to the concession of customs duty on certain toolboxes, which are now subject to a rate of 0% (section 269P(3)). This concession applies from the date of the application, 19 September 2006, as per subsection 269S(1) of the Act. The decision to grant this concession was based on the Chief Executive Officer (CEO) of Customs being satisfied that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged, aligning with section 269C.
The obligations imposed by the Act on the parties involved include the requirement for any person wishing to apply for a Tariff Concession Order (TCO) to ensure that their application is not for goods that are specified in section 269SJ as ineligible for such concessions. The CEO is mandated to assess the application against the core criteria, which include the absence of substitutable goods produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act. Additionally, the CEO must publish a notice in the Gazette inviting any interested party to submit reasons against the concession as soon as practicable after accepting the application as valid, as stipulated in subsection 269K(1).
In the event of a breach of the provisions set out in the Customs Act 1901 or any regulations made under the Act, there are potential civil or criminal penalties that may be imposed. Although the specific penalties for breaches related to Tariff Concession Orders are not detailed in the Explanatory Statement, under Australian law, breaches of customs regulations can result in substantial fines and, in serious cases, imprisonment. The maximum penalties for contravening customs laws can include fines of up to $22,200 for individuals and significantly higher amounts for corporations, alongside potential imprisonment terms depending on the severity and intent behind the breach.
The Customs Act 1901 and its associated regulations provide a framework for the administration of customs duty concessions, ensuring that such concessions are granted fairly and in accordance with legislative criteria. The Act requires that the rights of individuals and entities are not adversely affected by the implementation of a TCO, as outlined in the explanatory statement. Any person who feels that they have been unjustly impacted by the application of a TCO has the right to lodge a submission with the CEO, although in this case, no such submissions were received. The Act and the resulting TCO No. 0617300 ensure that the rights of importers are beneficially affected, allowing them to apply for refunds of duty paid on goods imported since the effective date of the concession.