EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0837913
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.
Cr Kennedy Pty Ltd applied for a TCO in respect of certain receivers on 30 October 2008.
Instrument
TCO No 0837913 was made on 30 January 2009. It declares that those certain receivers 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. 0837913 is taken to have come into force on 30 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 Customs Act 1901, enacted by the Parliament of Australia, establishes a framework for tariff concessions to promote fair trade and economic growth. This framework allows for the application of lower rates of customs duty to specific goods through Tariff Concession Orders (TCOs). The Act identifies a gap in ensuring that Australian consumers and businesses have access to competitively priced imported goods, particularly when no suitable domestic alternatives exist. This gap is addressed by allowing the Chief Executive Officer of Customs to issue TCOs, reducing duty on certain imported goods to zero if no substitutable goods are produced in Australia. The policy objective is to facilitate the importation of goods that would otherwise be prohibitively expensive, thereby supporting consumer choice and economic efficiency. The instrument in question, Tariff Concession Instrument No. 0837913, was introduced following an application by Cr Kennedy Pty Ltd for tariff concessions on certain receivers, resulting in a duty-free status for these goods.
Scope and Application
The Customs Act 1901, specifically through Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislative provision allows for reduced customs duties on specified goods, provided that the application for such a concession meets certain criteria and that no substitutable goods are produced in Australia in the ordinary course of business. This mechanism is designed to benefit importers by potentially reducing their duty costs on certain goods, which can be advantageous for businesses importing specific items. The scope of the Act applies to any person or entity that can demonstrate that the goods they import do not have Australian-made equivalents and thus qualify for the tariff concession. Geographically, the Act operates under the Commonwealth jurisdiction, and it extends its reach to any importer within Australia. There are, however, exclusions in place; goods specified in section 269SJ of the Act are ineligible for TCOs. The Act also mandates consultation processes whereby the CEO must invite submissions from interested parties when accepting a valid TCO application, although no such submissions were received in the case of TCO No 0837913. The commencement of a TCO is effective from the date the application is lodged, and it does not retroactively affect any pre-existing rights or liabilities of parties other than the Commonwealth.
Key Provisions
The main operative sections of this legislation pertain to Tariff Concession Orders (TCOs) under Part XVA of the Customs Act 1901 (section 269C). If an application for a TCO is submitted to the Chief Executive Officer of Customs (CEO) (section 269F), the CEO must first ascertain that the goods in question are not prohibited from such concessions under section 269SJ of the Act. If the CEO determines that the application is valid, the next step is to verify whether the application meets the core criteria, specifically if no substitutable goods were produced in Australia at the time the application was lodged (section 269C). If these criteria are met, the CEO must issue a written TCO, declaring that the specified goods will apply to a prescribed item in Schedule 4 of the Customs Tariff Act 1995 (section 269P(3)).
The obligations and requirements imposed by the Act on the parties involved are primarily centred around the submission and processing of TCO applications. The CEO is mandated to publish a notice in the Gazette once an application is accepted as valid, inviting any interested party to submit any objections to the granting of the concession (section 269K(1)). The CEO must also ensure that the application meets the stipulated criteria before making a TCO. Additionally, under section 269D, the term 'goods produced in Australia' must be interpreted in accordance with the definition provided, and similarly for 'ordinary course of business' (section 269E) and 'substitutable goods' (section 269D). Importers also have the right to apply for a refund of duty on goods imported since the TCO is taken to have come into force (Regulation 126(1)(r)).
In terms of breaches and penalties, the Act does not explicitly outline specific criminal or civil penalties for failing to comply with the requirements of a TCO or for submitting a false application. However, any breaches of the Customs Act 1901 or associated regulations could potentially lead to civil or criminal penalties as prescribed by other sections of the Act or related legislation. These could include fines or imprisonment for more severe violations. The exact penalties would depend on the nature and severity of the breach, as well as any additional laws that might apply.