EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0801763
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.
Qantas Airways Ltd applied for a TCO in respect of certain aircraft hangar doors on 1 February 2008.
Instrument
TCO No 0801763 was made on 11 April 2008. It declares that those certain aircraft hangar doors 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. 0801763 is taken to have come into force on 1 February 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 was enacted by the Commonwealth Parliament to establish a comprehensive framework for the administration of customs duties and the regulation of imports and exports. This Act facilitates the imposition of tariffs on imported goods and provides mechanisms for tariff concessions where appropriate. One such mechanism is the Tariff Concession Order (TCO), which can be applied for by individuals or companies to reduce or eliminate customs duties on specific goods under certain conditions. The 2008 instrument, F2008L02012, exemplifies the use of this mechanism by granting a TCO to Qantas Airways Ltd for certain aircraft hangar doors, effectively providing a free rate of duty on these goods, which otherwise would have incurred a general duty rate of 5%. The primary policy objective behind such concessions is to support Australian industries by making certain goods more competitively priced, thereby promoting economic efficiency and potentially stimulating local production where applicable. The instrument was introduced to address the specific needs of Qantas Airways Ltd in relation to the importation of aircraft hangar doors, ensuring that no substitutable goods were produced in Australia at the time of application, thus meeting the core criteria for tariff concessions as stipulated in the Customs Act 1901.
Scope and Application
The Customs Act 1901, as outlined in Tariff Concession Instrument No. 0801763, provides a framework through which the Chief Executive Officer of Customs may grant Tariff Concession Orders (TCOs) to reduce customs duty rates on specified goods. This legislative instrument applies to entities or individuals who apply for a concession on customs duties for goods not produced in Australia in the ordinary course of business, as per the core criteria stipulated in section 269C of the Act. The concession applies to the goods specified in the application, and in the case of Qantas Airways Ltd, this related to certain aircraft hangar doors. The application of this Act is national in scope, covering all jurisdictions within Australia, and it is enforced through the Customs Act 1901 and the Customs Tariff Act 1995. Notably, the Act excludes certain goods, as outlined in section 269SJ, from being eligible for a TCO. The TCO does not disadvantage any person other than the Commonwealth and does not impose any new liabilities on individuals or entities, though it does provide benefits to importers who can apply for a refund of duty on goods imported since the effective date of the concession.
Key Provisions
The main operative sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCOs) include sections 269C, 269B, 269D, 269E, 269F, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. The CEO is then required to assess whether the application meets the core criteria specified in section 269C, which includes the condition that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If these criteria are met, the CEO must make a written order (TCO) declaring the goods subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (paragraph 269P(3)).
The obligations imposed by the Act on the parties involved primarily concern the process of applying for and assessing TCOs. The CEO must ensure that any application received is assessed against the core criteria outlined in section 269C. This includes verifying that no substitutable goods were produced in Australia in the ordinary course of business. The CEO must also publish a notice in the Gazette, inviting any interested parties to submit submissions regarding the application (subsection 269K(1)). If no submissions are received, the CEO proceeds to make the TCO. Furthermore, the TCO does not disadvantage any person who had rights as at the date of registration, nor does it impose any liabilities on any person (subsection 269S(1)).
Offences and penalties under the Customs Act 1901 for breaches related to TCOs are not explicitly detailed in the explanatory statement. However, general provisions of the Act likely apply, which could include administrative sanctions, fines, or other penalties for non-compliance with customs regulations. The specific penalties would depend on the nature and severity of the breach, as outlined in other sections of the Customs Act 1901 and related legislation. The explanatory statement does not provide information on maximum penalties for breaches related to TCOs.
In summary, the key provisions of the Customs Act 1901 concerning TCOs involve the application process, the criteria for approval, and the publication of notices inviting submissions. The Act imposes obligations on the CEO to assess applications and make TCOs if the criteria are met. It ensures that the rights of existing parties are protected and does not impose liabilities on non-Commonwealth persons. While specific penalties for breaches are not detailed in the explanatory statement, general provisions of the Act would likely apply.