EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0709160
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.
Victorian Auto Gas Supplies Pty Ltd applied for a TCO in respect of certain LPG conversion kit parts on 15 June 2007.
Instrument
TCO No 0709160 was made on 24 August 2007. It declares that those certain LPG conversion kit parts 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. 0709160 is taken to have come into force on 15 June 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 was enacted by the Parliament of Australia to provide a comprehensive framework for the administration of customs and excise duties. The Act was introduced to address the need for a unified and streamlined legislative approach to the regulation of customs and excise, facilitating efficient trade and ensuring compliance with international obligations. One of the mechanisms established under this Act is the Tariff Concession Order (TCO), which allows for the reduction or exemption of customs duty on specific goods. This legislative instrument was designed to provide relief to industries and businesses that rely on the importation of certain goods not produced domestically, thereby supporting local industries and potentially reducing consumer costs. The Tariff Concession Instrument No. 0709160, enacted in 2007, exemplifies this approach by granting a tariff concession for certain LPG conversion kit parts, reflecting the policy objective to support niche industries and enhance the competitiveness of Australian businesses in the global market.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, aimed at reducing the customs duty on specific goods. This Act applies to individuals or entities seeking a concession on customs duties for particular goods by applying to the CEO. The application process requires that the goods in question are not specified in section 269SJ, which excludes certain goods from TCO eligibility. The Act stipulates that a TCO can only be granted if no substitutable goods are produced in Australia on the day the application is lodged. The scope of the Act is national, applying across all jurisdictions within Australia, and it does not impose any new liabilities on individuals or entities, except the Commonwealth. Importantly, the Act does not affect any pre-existing rights or impose liabilities for actions taken before the TCO is registered. The application of this Act can be further defined through subordinate instruments, which may extend or restrict the application of the TCOs.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0709160 under the Customs Act 1901 (the Act) are primarily concerned with the application and approval of Tariff Concession Orders (TCOs). Section 269F allows any person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of specific goods. The CEO is required to assess whether the application meets the core criteria outlined in section 269C, which stipulates that no substitutable goods must be produced in Australia in the ordinary course of business on the day the application was lodged. Further definitions and clarifications are provided in sections 269B, 269D, and 269E, which explain terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods."
Under section 269P(3) of the Act, if the CEO determines that the application meets the core criteria, they must issue a written order declaring that the goods in question are subject to a specified item in Schedule 4 of the Customs Tariff Act 1995, effectively granting the tariff concession. The CEO's decision is made public through a notice published in the Gazette, inviting any interested parties to submit objections or reasons why the TCO should not be granted. In this instance, no submissions were received, leading to the issuance of TCO No. 0709160 on 24 August 2007, which applies to certain LPG conversion kit parts.
The obligations imposed by the Act on the parties involved are centred around the application process and the CEO's role in assessing and approving TCOs. The applicant must ensure that their application is complete and meets the core criteria, particularly demonstrating that no substitutable goods are being produced in Australia. The CEO, on the other hand, must thoroughly review the application, consult with relevant stakeholders if necessary, and make a decision based on the provided evidence and criteria. Additionally, the CEO is required to publish a notice in the Gazette to allow for any objections or submissions from interested parties.
Failure to comply with the provisions of the Customs Act 1901 or the terms of a TCO can result in various consequences. While the explanatory statement does not detail specific offences or penalties, breaches of customs regulations generally can lead to civil or criminal penalties. For instance, knowingly making a false statement or providing misleading information in a customs declaration can result in civil penalties, including fines of up to $22,200 for individuals and $111,000 for corporations, as well as potential criminal penalties, which may include imprisonment for up to five years. Additionally, there may be further financial penalties or actions such as seizure of goods for non-compliance with customs duties or regulations.