EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701223
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.
Exide Australia Pty Ltd applied for a TCO in respect of certain battery sealers on 23 January 2007.
Instrument
TCO No 0701223 was made on 13 April 2007. It declares that those certain battery sealers 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. 0701223 is taken to have come into force on 23 January 2007.
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 imports and exports, including the imposition of customs duties on goods entering and leaving the country. The Act, through Part XVA, facilitates the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which provide lower rates of customs duty for specific goods. The problem or gap this legislation addresses is the need for a mechanism to reduce customs duties on goods for which there are no substitutable Australian-made alternatives. The Explanatory Statement for Tariff Concession Instrument No. 0701223, dated 13 April 2007, details the application process and decision-making criteria for TCOs, emphasising the importance of ensuring that such concessions do not disadvantage Australian producers or consumers. The policy objective is to encourage the importation of goods that cannot be produced domestically, thereby supporting market availability and consumer choice.
Scope and Application
The Tariff Concession Instrument No. 0701223 under the Customs Act 1901 applies to the specific goods, in this case certain battery sealers, for which a Tariff Concession Order (TCO) has been made. This legislation is pertinent to entities or individuals involved in the importation of these goods, particularly those who may benefit from the tariff concessions granted by the TCO. The instrument targets the reduction of customs duty on these specific goods from the general rate of 5% to 0%, thereby providing relief to importers. The scope of the Act extends to the Commonwealth, and the concessions are applicable nationally. The instrument was triggered by an application from Exide Australia Pty Ltd, and it came into effect on 23 January 2007, the date the application was lodged. The CEO of Customs was satisfied that no substitutable goods were produced in Australia, thereby meeting the core criteria for the TCO. The Act ensures that the rights of importers are beneficially affected and allows them to apply for a refund of duty on goods imported since the TCO's effective date, without imposing any new liabilities.
Key Provisions
The Tariff Concession Instrument No. 0701223, under the Customs Act 1901 (section 269F), allows the Chief Executive Officer of Customs (CEO) to issue a Tariff Concession Order (TCO) for certain goods, such as battery sealers in this case, provided they meet specific criteria. A TCO application is deemed to satisfy the core criteria if, on the day it is lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269C). The CEO must then make a written order (TCO) declaring that the goods subject to the application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (subsection 269P(3)). In this instance, the CEO determined that no substitutable goods were produced in Australia, thus satisfying the core criteria for the TCO.
The Act imposes several obligations on parties applying for a TCO. Firstly, the application must be lodged with the CEO, and the applicant must ensure that the goods in question do not have substitutable goods produced in Australia (section 269C). If the CEO is satisfied that the application meets the core criteria, they must make a written TCO. Additionally, the CEO must publish a notice in the Gazette inviting any person who believes the TCO should not be made to lodge a submission (subsection 269K(1)). The CEO must then consider these submissions before making a final decision. In this case, the CEO did not receive any submissions opposing the TCO, facilitating its approval.
Failure to comply with the requirements of the Customs Act 1901 or the terms of a TCO may result in legal consequences. The Act does not specify particular offences or penalties for non-compliance with a TCO. However, general provisions under the Customs Act 1901 might apply, including potential fines and imprisonment for breaches of customs laws. The specific penalties for such breaches would depend on the nature and severity of the offence, with the maximum penalties potentially reaching thousands of Australian dollars or more for serious violations. It is crucial for parties involved in importing or exporting goods under a TCO to adhere strictly to the Act's requirements to avoid these potential consequences.