EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0812471
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 applied for a TCO in respect of certain safety switches on 12 June 2008.
Instrument
TCO No 0812471 was made on 08 September 2008. It declares that those certain safety switches 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. 0812471 is taken to have come into force on 12 June 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, provides a framework for administering customs and excise duties. This legislation was introduced to address the need for a structured and efficient system to regulate the import and export of goods, ensuring compliance with tax and trade laws. Specifically, Part XVA of the Act establishes a scheme for Tariff Concession Orders (TCOs), which allow for the reduction or exemption of customs duties on certain goods. The Tariff Concession Instrument No. 0812471, issued on 8 September 2008, exemplifies this scheme in action, where Pilz Australia successfully applied for a TCO concerning certain safety switches. The instrument was enacted to provide tariff concessions on these goods, reflecting the policy objective of facilitating trade and ensuring that essential goods are accessible at reduced costs. This measure was implemented without any submissions opposing the concession, thereby ensuring that the rights of all parties, particularly importers, were protected and that no new liabilities were imposed retroactively.
Scope and Application
The Tariff Concession Instrument No. 0812471 under the Customs Act 1901 applies to the Chief Executive Officer of Customs (CEO) who is responsible for making Tariff Concession Orders (TCOs) for specific goods. This legislation pertains to any entity or individual seeking a tariff concession for certain goods that are not currently produced in Australia and have no substitutable goods domestically. The geographic reach of this Act is national, affecting all entities and individuals within Australia. The Act does not specify any exclusions, but it does provide that goods listed in section 269SJ of the Customs Act 1901 are ineligible for a TCO. The TCOs may extend or restrict application through subordinate instruments, but in this instance, no such changes have been noted. The application process involves the CEO reviewing the application to ensure it meets the core criteria, which includes verifying that no substitutable goods are produced in Australia, before making a written order. The commencement of the TCO is effective from the date the application was lodged, and it does not disadvantage any person other than the Commonwealth or impose any liabilities on such individuals.
Key Provisions
The main operative sections of this legislation, Tariff Concession Instrument No. 0812471, involve the making of a Tariff Concession Order (TCO) under section 269F of the Customs Act 1901 (section 269F). An application for a TCO can be made by a person to the Chief Executive Officer (CEO) of Customs. If the CEO is satisfied that the application does not pertain to goods specified in section 269SJ, which excludes certain goods from TCO eligibility, the CEO must evaluate the application against the core criteria in section 269C. If these criteria are met, the CEO must then issue a written TCO, as outlined in subsection 269P(3).
Under section 269C, the core criteria are met if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The definitions of 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are given in sections 269D, 269E, and 269F respectively. Specifically, substitutable goods are those produced in Australia that serve the same purpose or design use as the goods in question. For Pilz Australia's application regarding certain safety switches, the CEO determined that no such substitutable goods were produced in Australia, thus satisfying the core criteria. Consequently, TCO No. 0812471 was issued, declaring that these safety switches are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with a duty rate of free instead of the general rate of 5%.
The Act imposes several obligations and requirements on parties involved with TCOs. Firstly, the CEO must publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be granted, as stipulated in subsection 269K(1). In the case of TCO No. 0812471, no submissions were received in response to this notice. Secondly, a TCO is deemed to come into force on the day the application was lodged, as per subsection 269S(1). Therefore, TCO No. 0812471 is considered effective from 12 June 2008. Additionally, the TCO does not affect the rights of any person, other than the Commonwealth, as they stood at the date of registration, ensuring no adverse impact or new liabilities are imposed retroactively.
In terms of breaches and consequences, the Customs Act 1901 does not explicitly outline offences, penalties, or consequences for non-compliance with the provisions of TCOs. However, general legal principles apply, and any misuse or fraudulent application for a TCO could potentially lead to legal action under related sections of the Act. For example, section 235 of the Customs Act 1901 deals with fraudulent practices and can result in penalties such as fines or imprisonment, depending on the severity of the offence. While the specific maximum penalties are not detailed in the context of TCOs, the overarching legislative framework ensures that any breaches are subject to appropriate legal redress.