EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0936152
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.
Xtek Pty Ltd applied for a TCO in respect of certain inspection search kits on 24 September 2009.
Instrument
TCO No 0936152 was made on 27 November 2009. It declares that those certain inspection search kits 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. 0936152 is taken to have come into force on 24 September 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, provides a framework for managing the customs duty on imported goods. This legislation allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that apply reduced customs duties on specific goods, provided certain conditions are met. The Act was designed to address the need for flexibility in applying customs duties to imported goods, particularly in cases where no substitutable goods are produced in Australia. The explanatory statement for Tariff Concession Instrument No. 0936152 outlines the process by which Xtek Pty Ltd successfully applied for a TCO for certain inspection search kits, resulting in a reduction of the duty rate from 5% to free. This initiative was introduced to benefit importers by lowering the cost of importing these specific goods, thereby promoting trade and economic efficiency without imposing any liabilities or disadvantaging any party prior to the TCO's effective date.
Scope and Application
The Tariff Concession Instrument No. 0936152 under the Customs Act 1901 applies to goods that are the subject of a Tariff Concession Order (TCO) and specifically relates to the application made by Xtek Pty Ltd for certain inspection search kits. The Act enables the Chief Executive Officer of Customs (CEO) to reduce the customs duty on goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. This instrument is applicable across the Commonwealth of Australia, governing the import duties on the specified goods. The TCO does not affect any existing rights of individuals or entities, except to the benefit of importers who can now apply for a refund of duty on goods imported since the TCO's effective date. The CEO is mandated to consult with the public when considering a TCO application, although in this instance, no submissions were received. The TCO itself imposes no liabilities on any person and is effective from the date the application was lodged, which was 24 September 2009.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0936152 under the Customs Act 1901 (the Act) are outlined in section 269F, which allows an application to be made to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO). If the CEO is satisfied that the application meets the core criteria, such as no substitutable goods being produced in Australia in the ordinary course of business (section 269C), a written order is made, declaring the goods to which the TCO applies (section 269P(3)). For example, in this case, TCO No. 0936152 applies to certain inspection search kits, reducing the duty from 5% to free. This particular TCO came into force on the date the application was lodged, 24 September 2009 (subsection 269S(1)).
The obligations imposed by the Act on the parties it governs include the requirement for the CEO to assess whether an application meets the core criteria, as defined by section 269C, and to make a written order if the application is approved. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties, although in this case, no submissions were received (subsection 269K(1)). The CEO's role is to ensure that the process for granting TCOs is transparent and that all applications are fairly considered.
In terms of breaches and consequences, the Act does not explicitly detail specific offences, penalties, or civil/criminal consequences for non-compliance with the TCO provisions. However, the general enforcement mechanisms under the Customs Act would apply, including potential fines and imprisonment for breaches of customs laws. The precise penalties would depend on the nature and severity of the breach, as outlined in other sections of the Customs Act and the Customs Regulations 1995.