EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0822804
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 Limited applied for a TCO in respect of certain aircraft jacking set on 24 July 2008.
Instrument
TCO No 0822804 was made on 24 October 2008. It declares that those certain aircraft jacking set 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 10%. 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. 0822804 is taken to have come into force on 24 July 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 Parliament of Australia, serves as the principal legislative framework governing customs duties and related activities within Australia. Among its provisions, the Act facilitates the establishment of Tariff Concession Orders (TCOs) which provide tariff relief for certain imported goods. The introduction of TCOs aims to address economic considerations by reducing the cost of imported goods, thereby enhancing their affordability and competitiveness in the Australian market. This legislative instrument allows for the application of a lower rate of customs duty on specified goods, provided that no substitutable goods are produced in Australia. The Explanatory Statement for Tariff Concession Instrument No. 0822804 elucidates the process by which Qantas Airways Limited successfully applied for a TCO for certain aircraft jacking sets, resulting in a concession from the general rate of duty of 10% to a free rate. The policy objective underpinning this measure is to support specific industries by mitigating the financial burden of customs duties on essential imported goods.
Scope and Application
The Tariff Concession Instrument No. 0822804, made under Part XVA of the Customs Act 1901, applies specifically to goods in respect of which an application for a Tariff Concession Order (TCO) has been made, and in this case, it pertains to certain aircraft jacking sets applied for by Qantas Airways Limited. This Act allows for a lower rate of customs duty on goods that meet certain criteria, with the geographic scope of application being national, as the Customs Act 1901 operates throughout Australia. The legislation ensures that if no substitutable goods are produced in Australia in the ordinary course of business, the Chief Executive Officer of Customs must make a written order applying a prescribed tariff item from the Customs Tariff Act 1995, thereby providing tariff concessions. The application of this Act is restricted by section 269SJ, which lists goods that cannot be subject to a TCO, thereby excluding certain items from eligibility. The TCO does not affect the rights of any person adversely and does not impose any liabilities on persons other than the Commonwealth, ensuring that the rights of importers are beneficially affected.
Key Provisions
The key provisions of the Tariff Concession Instrument No. 0822804 under the Customs Act 1901 (the Act) revolve around the application and approval of Tariff Concession Orders (TCOs) for specific goods, in this case certain aircraft jacking sets. Under section 269F of the Act, an application for a TCO can be made by any person to the Chief Executive Officer (CEO) of Customs. If the application is deemed not to be in respect of goods specified in section 269SJ of the Act, which lists goods ineligible for TCOs, the CEO must then assess whether the application meets the core criteria outlined in sections 269C, 269B, and 269D of the Act. If the CEO is satisfied that the application meets these criteria, meaning no substitutable goods were produced in Australia in the ordinary course of business, a written order is made as per subsection 269P(3) of the Act, effectively granting the tariff concession.
The obligations imposed by this Act on the parties involved, particularly the CEO, include the responsibility to thoroughly evaluate TCO applications to ensure they comply with the stipulated criteria. The CEO must also publish a notice in the Gazette inviting any interested parties to submit any objections or reasons why the TCO should not be made. In the case of TCO No. 0822804, no submissions were received in response to this notice. The Act mandates that TCOs come into effect on the day the application is lodged, as specified in subsection 269S(1) of the Act. For TCO No. 0822804, this means it is effective from 24 July 2008.
Furthermore, the Act ensures that the implementation of a TCO does not retroactively disadvantage or impose liabilities on any person other than the Commonwealth in respect of actions taken before the registration date of the TCO. This provision protects the rights of importers who can benefit from applying for refunds of duty on goods imported since the effective date of the TCO, as outlined in paragraph 126(1)(r) of the Regulations. This legislative framework ensures that the concession applies prospectively, without affecting past transactions or imposing new liabilities.
The Act also delineates the consequences for non-compliance, although the specifics of these penalties are not detailed in the explanatory statement. Generally, breaches of the Customs Act 1901 can lead to significant civil and criminal penalties. For instance, under section 286 of the Act, a person who knowingly or recklessly makes a false statement in an application for a TCO may face penalties that can include substantial fines and, in severe cases, imprisonment. The maximum penalties can vary based on the severity and intent behind the breach but often encompass financial penalties that can be significant, alongside potential criminal charges for more egregious violations.