EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0903883
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.
Nhp Electrical Engineering Products applied for a TCO in respect of certain single role residual current circuit breakers on 05 February 2009.
Instrument
TCO No 0903883 was made on 01 May 2009. It declares that those certain single role residual current circuit breakers 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. 0903883 is taken to have come into force on 05 February 2009.
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 Australian Parliament, facilitates a system where Tariff Concession Orders (TCOs) can be applied for and granted by the Chief Executive Officer of Customs. This Act was designed to address the issue of ensuring that certain imported goods receive preferential customs duty rates when there are no domestic substitutes produced in Australia. This mechanism is intended to support industries and consumers by making certain goods more affordable. Specifically, Tariff Concession Instrument No. 0903883, made on 1 May 2009, addresses the application by Nhp Electrical Engineering Products for a TCO concerning certain single role residual current circuit breakers, resulting in a tariff concession that provides these goods with a duty-free rate as opposed to the general rate of 5%. The process involves rigorous criteria checks to ensure the application aligns with the objectives of the Act, and no objections were raised during the consultation period.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that apply lower rates of customs duty on specified goods. This Act applies to any person or entity who applies for a TCO and to the goods that are the subject of such an application. The scope of the Act encompasses all industries and transactions involving the importation of goods that may qualify for a TCO. Geographically, the Act operates under the Commonwealth jurisdiction, with its provisions extending across Australia. The Act includes exclusions for goods specified in section 269SJ, which cannot be subject to a TCO. Any further application or restrictions of the Act are managed through subordinate instruments, allowing for the detailed regulation of the tariff concession scheme. The commencement of a TCO is deemed to be effective from the date the application is lodged, and the rights of the Commonwealth and third parties are safeguarded against any retrospective disadvantage or liabilities.
Key Provisions
The main operative sections of this legislation (sections 269C, 269F, 269P, and 269K) establish the framework for the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (the CEO) under the Customs Act 1901. Section 269F allows a person to apply to the CEO for a TCO in respect of goods, provided the goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. If the application is valid, section 269C requires the CEO to consider whether the application meets the core criteria. These criteria, outlined in section 269C, mandate that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO determines that the core criteria are met, section 269P(3) requires the CEO to issue a written TCO, declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies.
The obligations imposed by this Act on the parties or entities it governs are primarily on the CEO of Customs. The CEO must ensure that any application for a TCO is assessed against the core criteria specified in section 269C. This involves confirming that no substitutable goods were produced in Australia in the ordinary course of business. Furthermore, the CEO is required under section 269K(1) to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. The CEO must also consider any submissions received in response to this notice before making a final decision on the TCO. The Act ensures that these obligations are carried out in a transparent and inclusive manner to maintain fairness and adherence to the statutory requirements.
Breaching the provisions of the Customs Act 1901 can lead to significant legal consequences. Under section 271 of the Customs Act, any person who contravenes the Act may be liable to a penalty not exceeding 10,000 penalty units or imprisonment for five years, or both, if prosecuted in a court. Additionally, the Act allows for the imposition of civil penalties. For example, section 276 imposes a penalty of 1,100 penalty units for each offence where an importer or exporter fails to comply with the Act. These penalties reflect the seriousness with which the Australian Government treats breaches of customs regulations, aiming to deter non-compliance and ensure the smooth operation of the customs duty system.