EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0835735
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.
Gfa Elektromaten Australia applied for a TCO in respect of certain direct drives on 15 October 2008.
Instrument
TCO No 0835735 was made on 14 January 2009. It declares that those certain direct drives 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. 0835735 is taken to have come into force on 15 October 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. 0835735 was enacted in 2009 under the Customs Act 1901 to facilitate tariff concessions for specific goods, thereby addressing the gap in duty rates for imported goods that do not have Australian-made equivalents. The Tariff Concession Order (TCO) system allows for the application of lower rates of customs duty on goods specified in such orders. The instrument was created following an application by Gfa Elektromaten Australia for tariff concessions on certain direct drives, and it was made effective from the date of the application, 15 October 2008. The Chief Executive Officer of Customs, upon being satisfied that no substitutable goods were produced in Australia, issued this TCO, which declares that the specified direct drives are subject to a duty rate of free, as opposed to the general rate of 5%. The enactment aims to ensure that importers of these goods can apply for duty refunds from the effective date, without any imposition of liabilities on any party.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) for specific goods, which then attract a lower rate of customs duty. An application for a TCO can be submitted by any person, provided the goods in question are not excluded under section 269SJ of the Act, which specifies certain categories of goods ineligible for tariff concessions. The CEO evaluates the application against core criteria outlined in section 269C, ensuring that no substitutable goods are produced in Australia at the time of application, as defined by sections 269D and 269E. If the application meets these criteria, a TCO is issued under section 269P(3), reducing the duty on the specified goods. This process ensures that the application of TCOs is both targeted and judicious, benefiting industries that do not have local production of substitutable goods. The geographic reach of this legislation is national, applying across Australia as per the Commonwealth’s legislative powers under the Customs Act 1901. The application of this Act is further refined through subordinate instruments which may provide additional specifications or procedural details not explicitly covered in the primary legislation.
Key Provisions
The main operative sections of this legislation, found under the Customs Act 1901, establish a framework for the creation of Tariff Concession Orders (TCOs) (sections 269F, 269C, 269P, and 269SJ). A TCO application can be submitted to the Chief Executive Officer (CEO) of Customs by a person, and if certain criteria are met, the CEO is required to make a written order that provides for a lower rate of customs duty on the goods in question (section 269F). The core criteria for a TCO application include that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). For the purposes of this Act, 'substitutable goods' means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use to which the goods the subject of the application can be put (section 269D).
The obligations imposed by the Act on the CEO include the responsibility to determine whether an application meets the core criteria and to make a written order if the criteria are satisfied (section 269P). The CEO is also required to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made, and to consider any submissions received (section 269K). Furthermore, the CEO must ensure that 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 in respect of anything done or omitted to be done before the date of registration (section 269S).
Breach of the obligations or requirements set out in the Act can result in civil or criminal consequences. While specific offences and penalties are not detailed in the provided text, the Act generally allows for enforcement actions which may include fines or other penalties as prescribed by law. The maximum penalties for breaches of customs laws can be significant, with potential criminal penalties for intentional or reckless breaches, and civil penalties for breaches that are less serious or unintentional. The exact penalties depend on the nature and severity of the breach, as well as the relevant provisions of the Customs Act 1901 and any other applicable legislation.