EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619015
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 Limited applied for a TCO in respect of certain motorcycle batteries on 30 November 2006.
Instrument
TCO No 0619015 was made on 02 March 2007. It declares that those certain motorcycle batteries 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. 0619015 is taken to have come into force on 30 November 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, provides a framework for the regulation of customs and excise duties, including the ability to grant tariff concessions on certain goods. The Tariff Concession Instrument No. 0619015, issued in 2007, was introduced to address a specific need for tariff concessions on certain motorcycle batteries as applied for by Century Yuasa Batteries Pty Limited. The instrument was enacted to ensure that no substitutable goods were produced in Australia, thus meeting the core criteria set out in the Customs Act. The primary objective of this instrument was to provide relief to importers by granting them a zero rate of duty on the specified motorcycle batteries, which otherwise would have been subject to a 5% duty rate. The instrument ensures that the rights of importers are positively affected, and it does not impose any liabilities or disadvantages on other parties as of the date of registration.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCOs) mechanism, allows for the reduction of customs duty on specific goods when certain conditions are met. The Act applies to any person or entity that wishes to apply for a TCO in relation to goods, provided that those goods are not specified in section 269SJ of the Act as ineligible for tariff concessions. The application process involves satisfying the core criteria set out in section 269C, which requires the Chief Executive Officer of Customs to determine that no substitutable goods are produced in Australia in the ordinary course of business. The Act operates on a national level, as it is a Commonwealth statute, thereby extending its jurisdiction across all states and territories in Australia. Any exclusions or exemptions are explicitly defined within the Act, particularly under section 269SJ, which lists goods that cannot be subject to a TCO. The scope of the Act can be further refined or expanded through subordinate instruments, such as regulations or further legislative amendments, although these are not detailed in the provided text. The commencement of a TCO is retroactive to the date the application was lodged, as stipulated by section 269S(1) of the Act, ensuring that the rights of importers are protected and potentially beneficially affected, such as in the case of duty refunds for goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0619015 (referenced as TCO No. 0619015) under the Customs Act 1901 provide for the reduction of customs duty on certain motorcycle batteries. Section 269F of the Act allows for the application for a Tariff Concession Order (TCO), while section 269C specifies that the CEO must consider whether the application meets the core criteria, namely, that no substitutable goods were produced in Australia in the ordinary course of business (section 269C). Upon satisfying these criteria, the CEO is required under section 269P(3) to issue a written order, effectively reducing the customs duty rate for the specified goods. In this case, TCO No. 0619015 was issued on 2 March 2007, applying a zero duty rate to certain motorcycle batteries under item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved. For instance, section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from interested parties if they believe the TCO should not proceed. In this instance, the CEO did not receive any submissions opposing the TCO. Moreover, section 269S(1) stipulates that the TCO is effective from the date the application was lodged, which in this case was 30 November 2006. The Act also ensures that the rights of any person other than the Commonwealth are not adversely affected by the TCO, as outlined in the explanatory statement.
Failure to comply with the requirements set out in the Customs Act 1901 can lead to various penalties and consequences. While specific offences and penalties are not detailed in the explanatory statement, breaches of customs regulations generally can result in both civil and criminal penalties. Civil penalties may include fines and financial penalties, while criminal penalties can encompass fines, imprisonment, or both, depending on the severity of the breach. The maximum penalties would be aligned with the broader framework of the Customs Act 1901, which includes significant fines and potential imprisonment terms for serious violations. The specific penalties for non-compliance with a TCO would be determined based on the nature and extent of the breach.