EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0714573
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.
Enersys Australia Pty Ltd applied for a TCO in respect of certain handling system on 06 September 2007.
Instrument
TCO No 0714573 was made on 16 November 2007. It declares that those certain handling systems 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. 0714573 is taken to have come into force on 06 September 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. 0714573, enacted under the Customs Act 1901, was introduced to address the issue of facilitating imports of certain goods by reducing or eliminating customs duties. This particular instrument was made by the Chief Executive Officer of Customs and applies to certain handling systems, providing a tariff concession that effectively makes the duty on these goods free. The instrument was introduced in response to an application by Enersys Australia Pty Ltd, and the CEO was satisfied that no substitutable goods were produced in Australia, thereby meeting the core criteria set out in section 269C of the Act. The policy objective is to ensure that the application of tariff concessions does not disadvantage any person and benefits importers by potentially allowing them to claim refunds on duties paid prior to the commencement of the concession.
The instrument was subject to a consultation process as required by subsection 269K(1) of the Customs Act 1901, which mandates the publication of a notice in the Gazette inviting submissions from any interested parties. In this instance, no submissions were received, leading to the issuance of the Tariff Concession Order. The instrument came into force on the date the application was lodged, 06 September 2007, and it does not adversely affect the rights of any person other than the Commonwealth, nor does it impose any new liabilities.
Scope and Application
The Customs Act 1901 provides a framework under which Tariff Concession Orders (TCOs) can be made, effectively reducing the customs duty on specified goods. The scope of this legislation applies to any entity or individual who wishes to apply for a concession on customs duties for specific goods. The application process involves submitting a request to the Chief Executive Officer of Customs, who assesses whether the application meets the core criteria set out in the Act, such as whether substitutable goods are produced in Australia. If the CEO is satisfied that the application meets these criteria, a TCO is issued, providing a lower rate of duty or even duty-free status on the goods specified in the TCO. This Act extends its jurisdiction across the Commonwealth of Australia and applies to all industries involved in the importation of goods. However, it explicitly excludes certain goods as outlined in section 269SJ of the Act, which cannot be subject to a TCO. The TCOs themselves may be further detailed or amended through subordinate instruments, but the primary legislation sets out the overarching framework and criteria for such concessions.
Key Provisions
The Tariff Concession Instrument No. 0714573, which amends the Customs Act 1901, introduces a tariff concession order (TCO) for certain handling systems, as applied by Enersys Australia Pty Ltd on 6 September 2007. Under section 269F, the Chief Executive Officer of Customs (CEO) is empowered to make a TCO if the application is not for goods specified in section 269SJ, which lists goods that cannot be subject to a TCO. The CEO must ensure the application meets the core criteria set out in section 269C, which requires that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business.
The obligations imposed on the parties under this legislation include the requirement for the CEO to consider applications for TCOs and make written orders if the criteria are met. This is detailed in section 269P(3), which mandates that a TCO must be made if the CEO is satisfied that the application meets the core criteria. Section 269K(1) further imposes an obligation on the CEO to publish a notice in the Gazette inviting submissions from any person who might have reasons why the TCO should not be made. The CEO must act on these submissions as soon as practicable after accepting a TCO application as valid.
The consequences for breach or failure to comply with the provisions of the Customs Act 1901 and the related TCO are not explicitly detailed in the explanatory statement. However, the general framework of Australian legislation suggests that failure to comply with the requirements for a TCO could potentially result in civil or criminal penalties. Such penalties could include fines or imprisonment, although the specific maximum penalties are not stated in this explanatory statement. The implications of non-compliance would typically depend on the specific breach and the broader legal context in which it occurs.