EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0702118
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.
E.G.O. Australia Pty Ltd applied for a TCO in respect of certain rotary electric switches on 09 February 2007.
Instrument
TCO No 0702118 was made on 04 May 2007. It declares that those certain rotary electric switches 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. 0702118 is taken to have come into force on 09 February 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 Tariff Concession Instrument No. 0702118 was enacted in 2007 as an amendment to the Customs Act 1901. The purpose of this legislation was to address the need for tariff concessions on specific goods, allowing for a reduction in customs duty for certain items. This was achieved through the creation of Tariff Concession Orders (TCOs) which could be applied for by interested parties and subsequently approved by the Chief Executive Officer of Customs, provided they met the core criteria outlined in the Act. The 2007 Instrument specifically relates to certain rotary electric switches, providing them with a zero rate of duty as opposed to the general rate of 5%.
The Customs Act 1901, as amended by this legislation, was enacted by the Australian Parliament. The policy objective is to facilitate the importation of goods that are not produced domestically, thereby potentially lowering costs for businesses and consumers and encouraging competition. The Explanatory Statement for this Instrument highlights that no objections were received during the consultation period, indicating broad acceptance of the proposed tariff concessions.
Scope and Application
The Tariff Concession Instrument No. 0702118 under the Customs Act 1901 applies to entities or individuals who wish to obtain a Tariff Concession Order (TCO) for specific goods, thereby reducing the customs duty rate on those goods. This legislation is primarily concerned with facilitating the application process for TCOs and ensuring that such concessions do not apply to goods that are or could be produced in Australia, as outlined in the Act. The geographic scope of this legislation is national, applying across Australia as part of the Commonwealth's customs framework. The application process involves the Chief Executive Officer of Customs evaluating whether an application meets the core criteria, such as the absence of substitutable goods produced in Australia, and subsequently publishing a notice in the Gazette inviting submissions. The application in question, concerning certain rotary electric switches, was accepted and published on 9 February 2007, with no submissions received against it. Consequently, the TCO came into force on the same date, effectively granting a free duty rate for the specified goods, which contrasts with the general rate of 5%. Importantly, the TCO does not retroactively affect any rights or liabilities of persons other than the Commonwealth, thereby protecting existing rights and ensuring that no new liabilities are imposed.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0702118 pertain to the process and conditions for making a Tariff Concession Order (TCO) under the Customs Act 1901. Specifically, section 269F allows an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning certain goods. The CEO is mandated to consider such applications, provided they do not pertain to goods specified in section 269SJ, which are ineligible for TCO. A TCO application is deemed to meet the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the date of application, as outlined in section 269C. These criteria are further defined in sections 269B, 269D, 269E, and 269F. If the CEO is satisfied that these criteria are met, they are required to make a written TCO order, as stipulated in section 269P(3), which declares that the specified goods are subject to a prescribed rate of duty under Schedule 4 of the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved. For instance, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO, as per subsection 269K(1). Additionally, the TCO must be made in writing, and it cannot disadvantage any person other than the Commonwealth or impose any liabilities on any person in respect of actions taken before the date of registration, as per subsection 269S(1). The rights of importers are beneficially affected, and they can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force, as provided in paragraph 126(1)(r) of the Regulations.
Breaches of the provisions outlined in the Customs Act 1901, including those related to the making and application of TCOs, can result in various consequences. While the explanatory statement does not specify the exact penalties for non-compliance, it is important to note that breaches of customs legislation can lead to both civil and criminal consequences. Civil penalties can include fines, while criminal penalties can result in imprisonment. The maximum penalties would depend on the specific nature and severity of the breach, as detailed in other sections of the Customs Act 1901 and related regulations.