EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0831993
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.
Tyrolit Australia Pty Ltd applied for a TCO in respect of certain drive units on 19 September 2008.
Instrument
TCO No 0831993 was made on 05 December 2008. It declares that those certain drive units 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. 0831993 is taken to have come into force on 19 September 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. 0831993, enacted under the Customs Act 1901, addresses the problem of ensuring fair and competitive pricing of imported goods by providing tariff concessions for certain items. The instrument was introduced to provide relief from customs duty for goods that are not produced domestically and for which there are no substitutable goods manufactured in Australia. This mechanism supports the policy objective of maintaining an efficient and competitive market for goods in Australia by facilitating access to competitively priced imported goods.
The Customs Act 1901 empowers the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply lower rates of customs duty to specified goods. This instrument was enacted by the relevant Australian legislature, following the application by Tyrolit Australia Pty Ltd for tariff concessions on certain drive units, which was approved as TCO No. 0831993. The TCO was effective from the date of the application, 19 September 2008, and no submissions were received against the application, indicating a consensus on the appropriateness of the tariff concession.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the application of Tariff Concession Orders (TCOs) through the Chief Executive Officer of Customs (CEO). The Act applies to any person or entity seeking to import goods that are not specified in section 269SJ of the Act, which details those goods that cannot be subject to a TCO. This legislative framework is designed to provide a lower rate of customs duty on goods that meet the core criteria set out in section 269C of the Act, which requires that no substitutable goods were produced in Australia on the day the application was lodged. The geographic reach of this Act is national, as it applies across all states and territories within Australia. The CEO’s decision on whether to issue a TCO is pivotal and must be made in accordance with the statutory requirements, including considering any submissions received during the consultation period stipulated in section 269K(1) of the Act. Once a TCO is issued, it has retrospective effect from the date the application was lodged, as per subsection 269S(1) of the Act, thus ensuring that the rights of importers are beneficially affected from that date. The TCO does not impose any liabilities on any person for actions taken before the TCO was registered, safeguarding existing rights and obligations.
Key Provisions
The Tariff Concession Instrument No. 0831993, under the Customs Act 1901, provides for a lower rate of customs duty on certain goods by declaring them subject to a Tariff Concession Order (TCO) (section 269P(3)). This concession applies to certain drive units which, under item 50 of Schedule 4 to the Customs Tariff Act 1995, have a general duty rate of 5% but are subject to a duty-free rate under this specific TCO. The TCO was made on 5 December 2008 following an application by Tyrolit Australia Pty Ltd on 19 September 2008, and it is effective as of the date of the application, 19 September 2008 (subsection 269S(1)).
The Act imposes certain obligations on the Chief Executive Officer (CEO) of Customs when processing a TCO application. Firstly, the CEO must verify that the application pertains to goods not specified in section 269SJ of the Act, which lists goods ineligible for TCOs (section 269F). Once the application is deemed valid, the CEO must assess whether it meets the core criteria, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the application date (sections 269C, 269D, 269E). If these criteria are met, the CEO is mandated to issue a written TCO (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting submissions on the TCO application from any interested parties, although no submissions were received for this particular TCO (subsection 269K(1)).
The Act outlines specific consequences for non-compliance with its provisions, though the explanatory statement does not detail these explicitly for the TCO process. Generally, under the Customs Act 1901, breaches of customs regulations can lead to various civil and criminal penalties. These may include fines and imprisonment, depending on the severity and nature of the offence. The maximum penalties for contravening customs laws can be substantial, often reflecting the seriousness of the breach, such as smuggling or providing false information. The exact penalties are specified in other sections of the Customs Act and related regulations, but they typically involve significant financial and custodial sanctions.
In summary, Instrument TCO No. 0831993 grants duty-free status to certain drive units under specific conditions outlined in the Customs Act 1901. It imposes clear obligations on the CEO to assess and process TCO applications correctly and mandates public notice of such applications to allow for stakeholder input. While the explanatory statement does not detail specific penalties for breaches related to TCOs, the Act broadly provides for severe penalties for non-compliance with its customs regulations.