EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0707395
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.
Ford Motor Company of Australia Limited applied for a TCO in respect of certain vibration energizers on 17 May 2007.
Instrument
TCO No 0707395 was made on 27 July 2007. It declares that those certain vibration energizers 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. 0707395 is taken to have come into force on 17 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 imposition of customs duty on imported goods. Within this framework, Part XVA of the Act introduces the concept of Tariff Concession Orders (TCOs), which can be applied for by individuals or entities to reduce the customs duty on specific goods. The Tariff Concession Instrument No. 0707395 was introduced to provide a concession for certain vibration energizers, addressing the gap where these goods were subject to a higher rate of customs duty. This instrument was created in response to an application by Ford Motor Company of Australia Limited, aiming to alleviate the financial burden on these particular goods by setting their duty rate to free, as no substitutable goods were being produced in Australia at the time of the application. The instrument was published in the Gazette, inviting submissions which none were received, thereby facilitating the concession's effective date aligned with the application's lodgement on 17 May 2007.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which apply reduced customs duties on certain goods. Any person may apply to the CEO for a TCO provided the goods in question are not specified in section 269SJ of the Act, which lists goods ineligible for such concessions. The CEO is obligated to assess whether the application meets core criteria, notably if no substitutable goods are produced in Australia at the time of application. A TCO becomes effective on the date the application is lodged, as per subsection 269S(1) of the Act, and does not retroactively affect the rights of any person other than the Commonwealth. This legislative framework allows for the reduction of customs duties, enhancing the import experience for beneficiaries by potentially offering them tariff relief and refund opportunities for duties already paid on eligible goods. The scope of the Act includes all individuals and entities seeking tariff concessions for goods imported into Australia, subject to the conditions outlined in the Act.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0707395, which was made under the Customs Act 1901, pertain to the granting of tariff concessions for certain vibration energizers. Section 269F of the Act allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of specific goods, provided the goods are not listed in section 269SJ, which enumerates goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria outlined in section 269C, such as the absence of substitutable goods produced in Australia, the CEO is required to make a written TCO, declaring that the goods in question are subject to a specific tariff item, in this case, item 50 of Schedule 4 to the Customs Tariff Act 1995.
Under this Act, the CEO has a clear set of obligations when processing a TCO application. Firstly, the CEO must ensure that the application pertains to goods not listed in section 269SJ. If the CEO finds that the application is valid, they must then determine whether it meets the core criteria as stipulated in section 269C. This involves verifying that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. If the CEO is satisfied that these criteria are met, they must publish a notice in the Gazette inviting any interested parties to submit any objections or reasons why the TCO should not be made, as per subsection 269K(1). In this case, no submissions were received. Once the TCO is made, it comes into effect on the date the application was lodged, according to subsection 269S(1).
The obligations and requirements imposed by the Customs Act 1901 on the parties governed by this legislation are primarily centred around transparency and adherence to the stipulated conditions. The CEO of Customs must rigorously follow the outlined criteria for approving a TCO, ensuring that no substitutable goods were produced in Australia on the application date. Importers, on the other hand, must ensure that their applications meet the necessary criteria and provide all required information to facilitate a smooth approval process. The Act also mandates that the CEO publish a notice in the Gazette to allow for any objections, ensuring that the process is open and fair.
The Customs Act 1901 includes provisions for offences, penalties, and civil or criminal consequences for breaches of the Act. While the specific penalties are not detailed in the explanatory statement, it is known that breaches of the Act can result in significant penalties. For instance, non-compliance with the tariff concession provisions could lead to financial penalties or other sanctions. The exact penalties would depend on the nature and severity of the breach, but they could include fines or other legal repercussions. The Act also provides for civil and criminal consequences for those who fail to comply with its provisions, although the maximum penalties are not specified in this particular context.