EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803520
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.
Super Cheap Auto Pty Ltd applied for a TCO in respect of certain garage creepers on 04 March 2008.
Instrument
TCO No 0803520 was made on 23 May 2008. It declares that those certain garage creepers 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. 0803520 is taken to have come into force on 04 March 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. 0803520, enacted in 2008, amends the Customs Act 1901 by allowing for tariff concessions on certain imported goods. This instrument was introduced to address the need for streamlined customs duty processes and to provide economic benefits to businesses that import specific goods not produced domestically. The Tariff Concession Orders (TCOs) are made by the Chief Executive Officer of Customs, who must be satisfied that the application for a concession meets the core criteria, such as the absence of substitutable goods produced in Australia. The policy objective of this legislative instrument is to support Australian businesses by reducing the cost of importing goods that are not manufactured locally, thereby fostering competitive practices and potentially encouraging innovation. The instrument was introduced by the Parliament of Australia and took effect from the date of the application, 4 March 2008, without imposing any liabilities on individuals or entities other than the Commonwealth.
Scope and Application
The Customs Act 1901 applies to the process of granting Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to provide a lower rate of customs duty on certain goods. An application for a TCO can be made by any person, but the Act excludes certain goods from being the subject of a TCO, such as those specified in section 269SJ. A TCO application meets the core criteria if no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. The CEO must make a written order (TCO) if satisfied that the application meets these criteria. This Act has a national jurisdictional reach across Australia, as it is a Commonwealth Act. The rights of importers will be beneficially affected by the TCO, while the rights of other persons will not be disadvantaged by the TCO. The TCO does not impose any liabilities on any person. The application of the Act may be extended or restricted through subordinate instruments, such as regulations.
Key Provisions
The main operative sections of the Customs Act 1901, particularly sections 269C, 269B, 269D, 269E, 269P, and 269SJ, detail the process for applying for and making a Tariff Concession Order (TCO). These sections require that for a TCO to be granted, the goods in question must not be substitutable by goods produced in Australia in the ordinary course of business, as defined by the Act. If an application for a TCO is made under section 269F, and it is not disqualified under section 269SJ, the Chief Executive Officer of Customs (CEO) must determine if the application meets the core criteria outlined in section 269C. If satisfied, the CEO must then issue a TCO under section 269P(3), specifying the goods and the reduced customs duty applicable to them.
The obligations imposed by the Act on parties applying for a TCO include ensuring that the application is valid and that the goods in question meet the criteria for a concession. The CEO is obligated to publish a notice in the Gazette inviting submissions on the proposed TCO and to consider any submissions received. Additionally, once a TCO is made, the CEO must ensure that it does not adversely affect any rights of persons as at the date of registration. The rights of importers, for instance, are specifically protected under paragraph 126(1)(r) of the Regulations, allowing them to apply for a refund of duty on goods imported since the TCO was taken to have come into force.
Breaching the requirements of the Customs Act 1901 can result in civil or criminal consequences. While the Explanatory Statement does not detail specific offences or penalties, it is known that the Act provides for a range of sanctions for non-compliance with its provisions. These can include fines and imprisonment, particularly where there is intentional or negligent disregard for the statutory requirements. The maximum penalties would depend on the specific nature and severity of the breach, as outlined in the broader provisions of the Customs Act and associated regulations. Failure to adhere to the obligations imposed by the Act, such as making false statements in an application or misrepresenting the nature of goods, could lead to serious repercussions.