EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0823648
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.
The Trustee For The Sneddon Family Trust applied for a TCO in respect of certain load release suspension system fittings on 29 July 2008.
Instrument
TCO No 0823648 was made on 17 October 2008. It declares that those certain load release suspension system fittings 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. 0823648 is taken to have come into force on 29 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, provides a framework under which Tariff Concession Orders (TCOs) can be made to reduce the customs duty on certain imported goods. The primary purpose of this legislative instrument is to ensure that Australian businesses can access goods that are not produced locally at competitive rates, thereby supporting economic efficiency and competitiveness. The explanatory statement for Tariff Concession Instrument No. 0823648, issued in 2009, outlines the application process and decision-making criteria for such concessions. In this instance, the Trustee for The Sneddon Family Trust applied for a TCO concerning certain load release suspension system fittings, and the Chief Executive Officer of Customs approved the concession as no substitutable goods were being produced in Australia. This decision effectively lowered the duty on these specific goods from 5% to free, effective from the date the application was lodged. The instrument ensures that the rights of importers are positively affected, with no imposition of liabilities on third parties.
Scope and Application
The Customs Act 1901 applies to any person or entity seeking to import goods into Australia and those involved in the production of goods within Australia, particularly when it comes to the application of customs duties and tariff concession orders. Specifically, the Act applies to the Chief Executive Officer of Customs who has the authority to make Tariff Concession Orders (TCOs) under section 269F. These orders provide for a lower rate of customs duty on goods specified in the order, provided that no substitutable goods are produced in Australia in the ordinary course of business, as outlined in sections 269C and 269SJ. The Act's jurisdiction is national, extending across the Commonwealth of Australia, and it interacts with the Customs Tariff Act 1995. Exclusions under the Act are narrowly defined, primarily focusing on goods specified in section 269SJ which cannot be subject to a TCO. The Act's application may be extended or restricted through subordinate instruments, though the primary focus remains on the core criteria for issuing TCOs. The Trustee for The Sneddon Family Trust's application for a TCO in respect of certain load release suspension system fittings, declared under TCO No. 0823648, exemplifies the Act's application in reducing the duty on specified goods from 5% to free, effective from the date of the application.
Key Provisions
The main operative sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCOs) are sections 269C, 269F, 269P, and 269S. Section 269F allows an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a TCO on certain goods. Section 269C outlines the core criteria that the application must meet, specifically that no substitutable goods were produced in Australia on the day the application was lodged. If these criteria are met, Section 269P requires the CEO to issue a written order, which is the TCO, specifying the lower rate of duty applicable to the goods. The TCO is deemed to have come into force on the date the application was lodged, as per Section 269S.
Under the Act, the CEO has a duty to assess applications for TCOs against the core criteria and to make a decision based on whether the application meets these criteria. The CEO must also ensure that the application does not relate to goods specified in Section 269SJ, which are ineligible for TCOs. Furthermore, the CEO is required to publish a notice in the Gazette, inviting any interested parties to submit objections or reasons why a TCO should not be granted. This process is outlined in Section 269K(1). In this particular case, the CEO did not receive any submissions in response to the Gazette notice.
The Customs Act 1901 imposes specific obligations on both the CEO and applicants for TCOs. The CEO must rigorously assess each application to ensure it meets the core criteria and does not pertain to goods that are ineligible under Section 269SJ. Once a TCO application is approved, the CEO must issue a written order detailing the tariff concession. On the other hand, applicants must ensure their applications are complete and provide all necessary information to demonstrate that no substitutable goods were produced in Australia on the application date. Failure to meet these obligations can result in the application being rejected.
Breaches of the Customs Act 1901 can lead to various penalties and consequences. While the Act does not explicitly detail the penalties for non-compliance with TCO provisions, general penalties for breaches of the Customs Act include fines and imprisonment. The maximum penalties can vary depending on the specific breach and its severity. For example, for offences involving fraud or deception, the maximum penalty can be significant, including fines of up to $220,000 for individuals and $1,100,000 for corporations, along with potential imprisonment terms. It is crucial for all parties involved to adhere to the requirements and obligations set forth by the Act to avoid these consequences.