EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0706300
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.
NDC Technology Australia Pty Ltd applied for a TCO in respect of certain chargers on 1 May 2007.
Instrument
TCO No 0706300 was made on 20 August 2007. It declares that those certain chargers 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 10%. 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. 0706300 is taken to have come into force on 1 May 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, established a framework for the regulation of customs and excise duties. It introduced a mechanism for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) to provide lower rates of customs duty on specified goods. This legislative instrument was designed to address the gap in the existing customs duty structure by allowing for targeted reductions in duty on specific items, thereby potentially stimulating trade and economic activity. The instrument specifically aimed to provide tariff concessions for certain goods that are not produced in Australia and for which no suitable domestic substitutes exist. The objective is to ensure that Australian consumers and businesses can access a range of competitively priced imported goods while also supporting the efficient operation of the customs duty system.
Scope and Application
The Customs Act 1901, as modified by Tariff Concession Instrument No. 0706300, applies to the granting of Tariff Concession Orders (TCO) for specific goods, thereby affecting the customs duty applicable to those goods. This Act primarily concerns entities or individuals who import or intend to import goods eligible for a tariff concession, seeking to benefit from reduced customs duties under the scheme established by the Act. The geographic reach of this legislation is national, as it pertains to customs duties across Australia, governed by the Commonwealth. The Act sets out specific criteria for the application and issuance of TCOs, including conditions where no substitutable goods are produced in Australia, thereby qualifying certain imported goods for reduced duty rates. This Act does not specify exclusions or thresholds beyond the criteria outlined within sections 269C, 269D, and 269E, which detail the production of substitutable goods in Australia and the ordinary course of business. The Act may be further interpreted and applied through subordinate instruments, which could elaborate on the specifics of eligibility and procedural requirements for TCO applications.
Key Provisions
The main operative sections of this Tariff Concession Order (TCO) relate to the application process and the criteria for approving a TCO under section 269F of the Customs Act 1901 (the Act) (subsections 269C and 269P(3)). Section 269F allows for an application to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods, provided that the goods are not specified in section 269SJ. The CEO must determine whether the application meets the core criteria, specifically whether no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, as per section 269C. If these criteria are satisfied, the CEO must issue a written TCO, which is done in this case under TCO No. 0706300. This TCO declares that the specified chargers are subject to a lower rate of customs duty as per item 50 of Schedule 4 to the Customs Tariff Act 1995, reducing the duty from 10% to 0%.
The Act imposes several obligations and requirements on both the applicant and the CEO. The applicant, NDC Technology Australia Pty Ltd, must ensure that their application meets all specified criteria and provide all necessary documentation to support their claim that no substitutable goods are produced in Australia. The CEO, on the other hand, is obligated to review the application, determine if it meets the core criteria, and if so, issue a TCO. Additionally, as per subsection 269K(1) of the Act, the CEO must publish a notice in the Gazette inviting any person who believes the TCO should not be made to submit their reasons. In this instance, the CEO did not receive any submissions.
The Act also outlines potential consequences for non-compliance or improper application of the TCO provisions. While specific penalties for breaches of the Customs Act 1901 are not detailed in this explanatory statement, it is implied that failure to comply with the provisions governing TCOs could result in legal repercussions. Such breaches might include making a false or misleading application, or not adhering to the criteria set out in section 269C. The seriousness of the breach would determine the specific penalties, which could range from fines to more severe criminal charges, depending on the context and the discretion of the court. The Act ensures that the TCO does not disadvantage any person other than the Commonwealth and does not impose any new liabilities on anyone.