EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804868
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 air horns on 22 April 2008.
Instrument
TCO No 0804868 was made on 11 July 2008. It declares that those certain air horns 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. 0804868 is taken to have come into force on 22 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 Customs Act 1901, enacted by the Commonwealth Parliament, includes provisions for Tariff Concession Orders (TCOs) that allow for lower rates of customs duty on certain goods. These orders are designed to address gaps in domestic production by providing tariff relief where substitutable goods are not produced in Australia. The Tariff Concession Instrument No. 0804868 was enacted to provide such relief for specific air horns, reducing their duty from 5% to free, based on the absence of substitutable goods produced domestically. The Chief Executive Officer of Customs assessed the application from Super Cheap Auto Pty Ltd and published a notice inviting submissions, which were not received. Consequently, the TCO was issued on 11 July 2008, effective from 22 April 2008, ensuring that importers can apply for duty refunds and that no new liabilities are imposed on any person.
Scope and Application
The Tariff Concession Instrument No. 0804868 under the Customs Act 1901 applies to specific goods, in this case certain air horns, as determined by the Chief Executive Officer of Customs (CEO). The instrument provides a concession on customs duty for these goods, reducing the duty rate to free from the general rate of 5% as set out in the Customs Tariff Act 1995. The application of this concession is subject to the core criteria outlined in section 269C of the Act, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. This concessional rate is effective from the date the application for the Tariff Concession Order (TCO) was lodged, 22 April 2008, in accordance with subsection 269S(1) of the Act. The application process involves an invitation for submissions published in the Gazette, although in this instance, no submissions were received. The instrument does not disadvantage any person other than the Commonwealth nor impose any liabilities on any person other than the Commonwealth in respect of anything done or omitted to be done before the date of registration. Importers of the affected goods may apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The Tariff Concession Instrument No. 0804868 under the Customs Act 1901 applies to certain air horns, granting them a concession that reduces the customs duty rate to free from the general rate of 5% (section 269F). This tariff concession was granted following an application by Super Cheap Auto Pty Ltd on 22 April 2008. The Chief Executive Officer of Customs made the concession effective from the date of the application, 22 April 2008, and the written order, known as the Tariff Concession Order (TCO), was issued on 11 July 2008 (subsection 269S(1)).
To ensure transparency and allow for any objections, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who might oppose the concession (subsection 269K(1)). However, in this case, no submissions were received. The core criteria for a TCO, as outlined in section 269C of the Act, require that on the date the application was lodged, no substitutable goods were being produced in Australia in the ordinary course of business. Given this, the CEO was satisfied that the application met these criteria and issued the TCO.
The obligations imposed by the Act on parties or entities include the requirement for applicants to ensure their applications are valid and that the goods they seek concessions for do not have substitutable equivalents being produced in Australia. The CEO is obligated to evaluate applications against the core criteria and, if satisfied, issue the TCO. The CEO also has the responsibility to publish notices in the Gazette to invite submissions from the public, thereby ensuring a transparent process.
Breaches of the Act’s provisions can lead to civil or criminal penalties. While the explanatory statement does not detail specific penalties, under the Customs Act 1901, breaches of customs laws can result in significant fines and, in some cases, imprisonment. The specific penalties depend on the nature and severity of the breach but can include substantial financial penalties and potential criminal charges for wilful or negligent violations.