EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0801730
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 Safety Engineers applied for a TCO in respect of certain breathable air compressors on 31 January 2008.
Instrument
TCO No 0801730 was made on 11 April 2008. It declares that those certain breathable air compressors 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. 0801730 is taken to have come into force on 31 January 2008.
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 Australian Parliament, established a framework for the application of customs duties on imported goods. A specific issue addressed by the Act is the facilitation of tariff concessions for certain goods, which is managed through the creation of Tariff Concession Orders (TCOs). The Tariff Concession Instrument No. 0801730 was introduced to provide a concession on the importation of certain breathable air compressors, responding to an application by Australian Safety Engineers. The primary objective of this Instrument, as outlined in the explanatory statement, is to grant a tariff concession where no substitutable goods are produced in Australia, thus benefiting importers by potentially reducing their duty liabilities and allowing them to apply for refunds on duties already paid. This Instrument came into force on the date the application was lodged, 31 January 2008, and does not affect any pre-existing rights or impose liabilities on any person.
Scope and Application
The Tariff Concession Instrument No. 0801730, issued under the Customs Act 1901, pertains to the application of tariff concessions on specific goods, namely certain breathable air compressors, for which Australian Safety Engineers applied on 31 January 2008. This instrument is applicable to these goods, imposing a rate of duty that is free, whereas the general rate under the Customs Tariff Act 1995 would be 5%. The application of the Tariff Concession Order (TCO) is contingent on the condition that no substitutable goods are produced in Australia, as outlined in section 269C of the Act, ensuring that the concession does not undermine domestic production. The TCO applies nationally, affecting the rights of importers by allowing them to apply for a refund of duty on goods imported since the day the TCO is deemed to have come into force, without imposing any new liabilities on any person. The instrument does not disadvantage any person by affecting their rights as at the date of registration for actions taken prior to this date.
Key Provisions
The Customs Act 1901, specifically Part XVA, governs the creation of Tariff Concession Orders (TCOs) which allow for reduced customs duty on certain goods. Section 269F enables an application for a TCO, provided the goods are not specified in section 269SJ, which lists goods ineligible for TCOs. The CEO must assess if the application meets the core criteria outlined in section 269C, which requires that no substitutable goods are produced in Australia at the time the application is lodged. Definitions for terms like "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively. If the application meets the criteria, the CEO must issue a TCO as per section 269P(3), specifying that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995.
Entities or individuals applying for a TCO must ensure their application aligns with the stipulations of section 269C. The CEO is mandated to publish a notice in the Gazette inviting any objections to the TCO under subsection 269K(1). If no objections are received, the CEO can proceed to make the TCO. This process is formalised under subsection 269S(1), which stipulates that the TCO comes into effect on the day the application is lodged. For TCO No. 0801730, this date is 31 January 2008. The TCO does not retroactively affect any existing rights or impose liabilities on individuals or entities other than the Commonwealth.
The TCO imposes specific obligations on the parties involved, particularly on importers who can now benefit from reduced customs duty rates. Under paragraph 126(1)(r) of the Regulations, importers can apply for a refund of duties on goods imported since the effective date of the TCO. This provision ensures that the benefits of the TCO are passed on to the end-users. The TCO itself does not impose any new liabilities on any party, ensuring that it operates within the bounds of existing legal frameworks while providing tariff relief.
For any breaches or non-compliance with the requirements set out in the Customs Act 1901, there are potential civil and criminal consequences. The Act outlines various offences and penalties, although the specific maximum penalties are not detailed in the explanatory statement. Generally, breaches may result in fines, imprisonment, or both, depending on the severity and nature of the offence. The detailed penalties would be found in other sections of the Customs Act 1901 or related regulations, ensuring that there are robust mechanisms in place to enforce compliance and maintain the integrity of the tariff concession scheme.