EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0712308
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.
Exlites Pty Ltd applied for a TCO in respect of certain silicon batteries on 31 July 2007.
Instrument
TCO No 0712308 was made on 9 October 2007. It declares that those certain silicon batteries 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 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. 0712308 is taken to have come into force on 31 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. 0712308, enacted in 2007, is a legislative instrument under the Customs Act 1901, which provides a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This instrument was introduced to address the specific issue of applying lower rates of customs duty on goods, in this case, certain silicon batteries, where no substitutable goods are produced in Australia. The Act facilitates the application process for tariff concessions, ensuring that the core criteria are met before a TCO is issued, thereby supporting trade and economic policy objectives by potentially reducing the cost of imported goods for businesses and consumers.
The instrument was enacted by the relevant authority under the Customs Act 1901, with the policy objective of ensuring that the application for tariff concessions is processed in a manner that is fair and considers any potential submissions against the concession. In this instance, no submissions were received against the concession for the specified silicon batteries, leading to the issuance of TCO No. 0712308, which sets the duty rate at 0% for these goods, effective from the date of application, 31 July 2007.
Scope and Application
The Customs Act 1901, specifically Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (the CEO). This legislation allows for the application of lower rates of customs duty on goods that are subject to a TCO. An application for a TCO can be made by any person, provided that the goods in question are not those specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The CEO must assess whether the application meets the core criteria, which include ensuring that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. If these criteria are met, the CEO is required to make a written order, effectively reducing the duty on the specified goods. In the case of Exlites Pty Ltd's application for a TCO on certain silicon batteries, the CEO determined that no substitutable goods were produced in Australia, leading to the issuance of TCO No. 0712308, which set the duty rate at 0% instead of the general rate of 5%. The TCO's application does not affect any pre-existing rights or liabilities of individuals or entities, except for potentially benefiting importers who can apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The main provisions of Tariff Concession Instrument No. 0712308, made under the Customs Act 1901, pertain to the application and implementation of Tariff Concession Orders (TCOs). According to section 269F of the Act, an individual may apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning specific goods. The CEO must assess whether the application meets the core criteria outlined in section 269C of the Act, which requires that no substitutable goods were produced in Australia on the day the application was lodged. If the application satisfies these criteria, the CEO is required to issue a written order, as stipulated in section 269P(3), declaring the goods to which the TCO applies. In this case, the TCO No. 0712308 was made on 9 October 2007, declaring that certain silicon batteries are subject to a 0% duty rate, a reduction from the general 5% duty rate.
The obligations imposed by this legislation on the parties or entities it governs are primarily on the CEO of Customs. Upon receiving an application for a TCO, the CEO must determine if the application is valid and meets the criteria specified in section 269C of the Act. If the application is deemed valid, the CEO must issue a TCO. The CEO must also publish a notice in the Gazette, inviting any interested parties to lodge submissions if they believe the TCO should not be granted, as outlined in section 269K(1) of the Act. In the case of TCO No. 0712308, no submissions were received. Furthermore, the TCO does not retroactively affect the rights of any person, nor does it impose any liabilities on individuals for actions taken before the TCO’s effective date.
The Customs Act 1901 outlines specific consequences for breaches of its provisions, although the explanatory statement does not detail specific offences or penalties related to the issuance of TCOs. Generally, breaches of the Customs Act may lead to civil or criminal penalties, depending on the nature and severity of the offence. For example, section 252 of the Act allows for fines and imprisonment for offences such as fraudulent importation or exportation of goods. However, the explanatory statement for this particular TCO does not specify any particular penalties or consequences for breaches directly related to the issuance of TCO No. 0712308. The focus remains on ensuring the correct application and implementation of the TCO to benefit eligible importers without imposing undue liabilities or disadvantages on others.