EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0715404
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.
Thales Atm Pty Ltd applied for a TCO in respect of certain air navigation systems antennas on 19 September 2007.
Instrument
TCO No 0715404 was made on 07 December 2007. It declares that those certain air navigation systems antennas 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. 0715404 is taken to have come into force on 19 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. 0715404, enacted under the Customs Act 1901, addresses the issue of providing tariff concessions for specific goods that are not produced domestically. The instrument was developed to facilitate the reduction of customs duties for imported goods where there is no domestic production of substitutable goods. This measure aims to support industries by making imported goods more competitively priced against local products, thereby encouraging trade and economic activity. Enacted by the Australian Parliament, the policy objective behind this instrument is to ensure fair trade practices by providing a pathway for tariff concessions that benefit both consumers and businesses without disadvantaging any party. By providing a mechanism for the Chief Executive Officer of Customs to grant tariff concessions, the legislation seeks to enhance the efficiency and responsiveness of customs duties to market conditions.
Scope and Application
The Tariff Concession Instrument No. 0715404 applies to certain air navigation systems antennas, specifically those identified in the instrument. The Customs Act 1901 allows for Tariff Concession Orders (TCOs) to be made by the Chief Executive Officer of Customs (CEO) under Part XVA, which applies to any person or entity that imports these specified goods. The instrument is designed to provide a lower rate of customs duty for these goods, and it operates on a national level within Australia. The instrument excludes any goods that are specified in section 269SJ of the Act, which outlines those goods that cannot be subject to a TCO. The application of the TCO is contingent upon the CEO being satisfied that the goods are not substitutable by products manufactured in Australia. The instrument came into force on the date the application was lodged, 19 September 2007, and it does not affect the rights of any person as at the date of registration in a manner that would disadvantage them or impose any liabilities for actions taken prior to the registration.
Key Provisions
The main operative sections of this legislation, namely section 269C, 269B, and 269P(3) of the Customs Act 1901, establish the framework for Tariff Concession Orders (TCOs). Section 269C outlines that a TCO application will be considered by the Chief Executive Officer (CEO) of Customs if, on the day the application is made, no substitutable goods are produced in Australia. Section 269B defines key terms such as ‘goods produced in Australia’ and ‘ordinary course of business’. Section 269P(3) mandates that if the CEO is satisfied that the application meets the criteria, they must issue a written order, effectively granting the tariff concession. In this specific case, TCO No. 0715404, which was made on 7 December 2007, applies to certain air navigation systems antennas, declaring them as goods subject to a 5% duty rate, but with a concession making the rate free.
The obligations imposed by the Act on the parties involved are primarily centred around the application and assessment processes for TCOs. Thales Atm Pty Ltd, as the applicant, must ensure their application complies with the specified criteria, particularly that no substitutable goods are produced in Australia. The CEO of Customs has the responsibility to assess the application, determine if the core criteria are met, and, if satisfied, issue a written TCO. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections or submissions against the proposed TCO. In this instance, no submissions were received, which facilitated the CEO's decision to proceed with the TCO.
Breaches of the provisions within this Act could result in various consequences. Although the specific Act does not outline penalties for non-compliance, it is within the scope of related legislation, such as the Customs Act 1901, that penalties for breaches could be found. These could include fines or other administrative penalties for incorrect applications or misrepresentations made by the applicant. Furthermore, any failure by the CEO to adhere to the statutory obligations could result in legal challenges or administrative reviews, potentially leading to nullification of the TCO if procedural errors are identified. It is important to note that the TCO itself does not impose any new liabilities on individuals or entities other than the Commonwealth and allows for duty refunds for importers under certain conditions.