EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0712306
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.
Australian Discount Retail (Trading) Pty Limited applied for a TCO in respect of certain solar powered battery chargers on 30 July 2007.
Instrument
TCO No 0712306 was made on 08 October 2007. It declares that those certain solar powered battery 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 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. 0712306 is taken to have come into force on 30 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 Tariff Concession Instrument No. 0712306, enacted in 2007, is an instrument made under the Customs Act 1901. This Act, established by the Australian Parliament, provides the framework for customs and excise duties in Australia. The Tariff Concession Instrument was introduced to address the need for tariff concessions for specific goods, enabling lower rates of customs duty for those goods that meet certain criteria. The instrument was enacted to facilitate the application process for tariff concessions, ensuring that goods which do not have substitutable Australian-made alternatives are eligible for reduced customs duty rates, thereby encouraging imports of such goods.
The instrument was made following an application by Australian Discount Retail (Trading) Pty Limited for tariff concessions on certain solar-powered battery chargers, which were approved by the Chief Executive Officer of Customs. The CEO determined that no substitutable goods were produced in Australia, thus meeting the core criteria set out in the Customs Act. The instrument provides for these specific solar-powered battery chargers to be subject to a free rate of duty instead of the general 5% rate, effective from the date the application was lodged. The enactment of this instrument aligns with the policy objective of providing tariff relief to support the import of goods that are not produced domestically, thereby benefiting importers and potentially lowering consumer prices.
Scope and Application
The Tariff Concession Instrument No. 0712306, made under the Customs Act 1901, applies to entities such as Australian Discount Retail (Trading) Pty Limited that seek a tariff concession order (TCO) for goods not produced in Australia and not listed in section 269SJ of the Act. The TCO process involves an application to the Chief Executive Officer of Customs, who assesses whether the application meets the core criteria as outlined in sections 269C, 269B, and 269D of the Act, ensuring no substitutable goods are produced domestically. This instrument specifically pertains to solar powered battery chargers, granting them a duty-free status under item 50 of Schedule 4 to the Customs Tariff Act 1995. The TCO's jurisdiction spans the Commonwealth, with the instrument coming into force on the date the application was lodged, 30 July 2007. The TCO does not retroactively affect rights or impose liabilities on any person other than the Commonwealth, and it allows importers to apply for duty refunds for imports made since the effective date of the TCO.
Key Provisions
The main sections of the Tariff Concession Order No. 0712306 under the Customs Act 1901 include section 269C, which outlines the core criteria for a Tariff Concession Order (TCO). Specifically, section 269C states that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269C). Substitutable goods are defined as those produced in Australia that are put, or are capable of being put, to a use corresponding with the goods the subject of the TCO application (section 269D, 269E, 269P(3)). If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they must make a written order, declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (section 269P(3)).
The obligations imposed by this Act on the parties or entities it governs are primarily centred around the application process for TCOs. The CEO must ensure that applications are reviewed in accordance with the criteria set out in section 269C. This includes verifying that no substitutable goods were produced in Australia at the time the application was lodged. The CEO is also required to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as per section 269K(1). If no submissions are received, the CEO must proceed with making the TCO. Additionally, the CEO must ensure that the rights of existing parties are not adversely affected by the issuance of a TCO, in line with section 126(1)(r) of the Regulations.
Breaches of the provisions under the Customs Act 1901 can lead to various consequences, including civil and criminal penalties. While specific offences and penalties are not detailed in the explanatory statement, general provisions of the Customs Act may apply. For example, under section 225A of the Act, a person who knowingly makes a false statement in connection with a customs matter may be liable for a penalty. The maximum penalty for such an offence can be significant, including substantial fines and potential imprisonment, depending on the severity and intent behind the breach. Furthermore, any misrepresentation or fraudulent activity in the application process for a TCO could also lead to severe civil and criminal repercussions.