EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0916169
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.
Model Engines Australia applied for a TCO in respect of certain accumulators lithium polymer on 12 May 2009.
Instrument
TCO No 0916169 was made on 31 July 2009. It declares that those certain accumulators lithium polymer 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. 0916169 is taken to have come into force on 12 May 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 Parliament of Australia, provides a framework for the administration of customs and excise duties, including the process for granting tariff concession orders (TCOs) which offer reduced customs duty rates on certain goods. The legislation seeks to address the problem of ensuring fair trade practices by providing duty relief on goods for which no suitable Australian-made alternatives exist, thereby supporting industry competitiveness and innovation. Tariff Concession Order No. 0916169, issued under the authority of the Act, specifically addresses an application by Model Engines Australia for a TCO on certain accumulators lithium polymer. This instrument was introduced to provide a tariff concession for these goods, as determined by the Chief Executive Officer of Customs, who found that no substitutable goods were produced in Australia. The TCO came into effect on the date the application was lodged, 12 May 2009, and provides a zero rate of duty for these specified goods, while ensuring no adverse effects on the rights of persons other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0916169 under the Customs Act 1901 applies to goods that are subject to a Tariff Concession Order (TCO), specifically certain accumulators lithium polymer, for which Model Engines Australia submitted an application on 12 May 2009. The Act mandates that the Chief Executive Officer of Customs (CEO) must assess the application against the core criteria, ensuring that no substitutable goods are produced in Australia in the ordinary course of business. If the application meets these criteria, the CEO is required to issue a written order that effectively grants a concession on the customs duty for the specified goods. The geographic reach of this legislation is national, as it pertains to goods entering Australia and the customs duties levied by the Commonwealth. The TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on individuals or entities except for the Commonwealth. The instrument took effect from the date the application was lodged, providing immediate benefits to importers who can apply for a refund of duty on the specified goods imported since the commencement date. The Act also allows for the CEO to make further regulations or orders that may extend or restrict the application of the TCO, thereby enhancing the scope of its application.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0916169 are sections 269C, 269F, 269P, and 269SJ of the Customs Act 1901, which together establish the framework for making Tariff Concession Orders (TCOs) (sections 269C and 269F). Section 269C requires that for a TCO application to meet the core criteria, no substitutable goods must be produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). If the Chief Executive Officer of Customs (CEO) is satisfied that the application meets these criteria, they must make a written order (a TCO) declaring that the goods subject to the application are to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (section 269P). Section 269SJ outlines the goods that cannot be subject to a TCO. This specific TCO (No. 0916169) was made on 31 July 2009 and declares that certain accumulators lithium polymer are goods to which item 50 of Schedule 4 to the Tariff applies, with a rate of duty of free, as opposed to the general rate of 5%.
The obligations and requirements imposed by the Act on the parties it governs include the necessity for an applicant to ensure their TCO application meets the core criteria by demonstrating that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. The CEO must then make a decision based on this criterion, and if satisfied, issue a TCO. Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties who might have reasons why the TCO should not be made (subsection 269K(1)). In this instance, the CEO did not receive any submissions in response to this notice.
In terms of offences, penalties, or civil/criminal consequences for breach, the Customs Act 1901 does not specify particular offences or penalties directly related to the making of a TCO. However, general provisions of the Act and associated regulations would apply to any improper conduct or non-compliance with the requirements of the Act. For instance, any misrepresentation or incorrect information provided in a TCO application might lead to civil or administrative penalties. Furthermore, any fraudulent activity related to customs duties could attract criminal penalties under other sections of the Customs Act. It is important to note that the TCO itself does not impose any new liabilities on any person and does not affect the rights of any person as at the date of registration.