EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802663
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.
Pilz Australia Industrial Automation Lp applied for a TCO in respect of certain safety relays on 04 April 2008.
Instrument
TCO No 0802663 was made on 27 June 2008. It declares that those certain safety relays 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. 0802663 is taken to have come into force on 04 April 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 Tariff Concession Instrument No. 0802663 was enacted in 2008 under the Customs Act 1901, which governs the imposition and collection of customs duty in Australia. This particular instrument was introduced to address the need for tariff concessions on specific goods that are not produced domestically, thereby ensuring a level playing field for Australian importers and manufacturers. The instrument facilitates the application process for tariff concessions, allowing for a lower rate of customs duty on certain imported goods that do not have substitutable domestic counterparts. This was enacted by the Chief Executive Officer of Customs, following a valid application from Pilz Australia Industrial Automation Lp for certain safety relays, which met the core criteria outlined in section 269C of the Act. The policy objective of this legislation is to provide economic benefits to importers by reducing the cost of imported goods and ensuring fair competition within the market.
Scope and Application
The Tariff Concession Instrument No. 0802663 under the Customs Act 1901 applies to any entity that seeks to import specific goods into Australia, in this case certain safety relays, and provides them with a concessionary rate of customs duty. The Act allows for the Chief Executive Officer of Customs to make a Tariff Concession Order (TCO) for goods, provided that the application meets certain core criteria, such as the absence of substitutable goods produced in Australia. This instrument specifically applies to safety relays and was made in response to an application by Pilz Australia Industrial Automation Lp, effective from 04 April 2008. The instrument reduces the general rate of duty from 5% to free, benefiting importers who can apply for a refund of duty on these goods imported since the commencement date. The instrument's scope is limited to the Commonwealth and does not disadvantage or impose liabilities on any other person.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0802663 under the Customs Act 1901 (the Act) include sections 269C, 269F, 269P, and 269SJ. Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) for goods. Section 269C sets out the core criteria for the TCO application, which must be satisfied to allow the CEO to make a TCO. This involves ensuring that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. If the application meets these criteria, section 269P(3) requires the CEO to make a written order (the TCO) declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations and requirements on the parties involved. Firstly, any person seeking a TCO must submit an application to the CEO under section 269F, ensuring it is not in respect of goods specified in section 269SJ, which lists goods ineligible for a TCO. The CEO must then assess the application against the core criteria in section 269C, verifying that no substitutable goods are produced in Australia on the application date. Upon meeting these criteria, the CEO is mandated to publish a notice in the Gazette under subsection 269K(1) inviting submissions from any interested parties who may oppose the TCO. The CEO must also ensure that the TCO does not adversely affect any person’s rights as at the date of registration or impose any liabilities for actions taken before the TCO’s registration.
The legislation provides for specific offences, penalties, or civil and criminal consequences for non-compliance. Although the Explanatory Statement does not explicitly state penalties for breaches, under the Customs Act 1901, general penalties for customs offences can include fines, imprisonment, or both. The maximum penalties depend on the severity of the offence. For instance, under section 245-50 of the Crimes Act 1914, serious breaches can result in substantial fines and imprisonment terms that can extend up to several years, reflecting the seriousness of evading customs duties or making false statements to the CEO. Furthermore, any person who contravenes the provisions of the Customs Act 1901 may face civil actions for damages resulting from the breach, in addition to any criminal sanctions.