EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0711517
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.
Antash Pty Ltd applied for a TCO in respect of certain self powering portable dynamo torches on 17 July 2007.
Instrument
TCO No 0711517 was made on 02 October 2007. It declares that those certain self powering portable dynamo torches 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. 0711517 is taken to have come into force on 17 July 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 Parliament of Australia, establishes a framework for the administration of customs duties and related matters. The Act includes provisions for Tariff Concession Orders (TCOs), which allow for the reduction or exemption of customs duty on certain imported goods. Enacted to facilitate trade by reducing the cost of importing specific goods, this legislative instrument addresses the economic gap by encouraging the import of goods that are not produced domestically, thereby promoting competition and consumer choice. TCO No. 0711517, made under the Customs Act, provides a tariff concession for self-powering portable dynamo torches, reducing the duty on these items from 5% to free, effective from the date of the application on 17 July 2007. This measure aims to benefit importers by potentially allowing them to claim refunds on duties paid on these goods since the commencement date of the concession.
Scope and Application
The Customs Act 1901 provides a mechanism through which the Chief Executive Officer of Customs can grant tariff concession orders (TCOs) to lower the rate of customs duty on certain goods. Specifically, the Act applies to individuals and entities that seek to import goods eligible for tariff concessions, thereby affecting the importation process and the duties associated with it. The Act's jurisdictional reach is national, as it is a Commonwealth Act. The application for a TCO must meet the core criteria, which includes ensuring that no substitutable goods are produced in Australia at the time of application. The Act further specifies that the TCO does not disadvantage any person by affecting rights or imposing liabilities in respect of actions taken before the TCO is registered. The rights of importers are positively affected as they can apply for a refund of duty on goods imported since the TCO is deemed to have come into force. The application of the Act can be extended or restricted through subordinate instruments, which may provide additional criteria or guidelines for the issuance of TCOs.
Key Provisions
The key provisions of this legislation, as outlined in Tariff Concession Instrument No. 0711517, are primarily concerned with the granting of a Tariff Concession Order (TCO) under the Customs Act 1901. This TCO applies to certain self-powering portable dynamo torches and is intended to provide a tariff concession by setting the rate of customs duty on these goods at zero, rather than the general rate of 5% (sections 269P(3) and 269F). The primary requirement is that the Chief Executive Officer (CEO) of Customs must determine whether an application for a TCO meets the core criteria, specifically that no substitutable goods are produced in Australia in the ordinary course of business (sections 269C, 269D, 269E, and 269SJ).
Entities and individuals governed by this Act, particularly those who may apply for a TCO, must ensure that their applications are complete and meet the criteria set out in section 269C. This includes providing evidence that no substitutable goods are being produced in Australia, as defined by section 269D. Additionally, once an application is lodged, the CEO is obligated to publish a notice in the Gazette inviting submissions from any interested parties, though in this case, no submissions were received (subsection 269K(1)). The CEO must then decide whether to grant the TCO based on the application and any submissions received.
Should any party or entity breach the obligations or requirements set out in the Customs Act 1901 or the associated regulations, they may face penalties. The specific penalties are not detailed in the explanatory statement but generally, breaches of customs legislation can lead to civil or criminal penalties, including fines and potential imprisonment, depending on the severity and intent of the breach. The maximum penalties for customs offences can be found in the relevant sections of the Customs Act 1901 and the Customs Regulations 1999, but these are not specified within the explanatory statement provided.