EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0946641
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.
Department of Defence applied for a TCO in respect of certain robotic explosive ordinance disposal on 08 January 2009.
Instrument
TCO No 0946641 was made on 03 April 2009. It declares that those certain robotic explosive ordinance disposal 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. 0946641 is taken to have come into force on 08 January 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, includes a scheme under which Tariff Concession Orders (TCOs) may be made to provide tariff concessions on certain goods. These concessions are designed to encourage the production of goods in Australia by ensuring that imported goods are not produced domestically, thus preventing any undue disadvantage to Australian producers. The Department of Defence applied for a Tariff Concession Order in respect of certain robotic explosive ordinance disposal on 8 January 2009, seeking a tariff concession to facilitate the import of these specific goods. The Chief Executive Officer of Customs was satisfied that no substitutable goods were produced in Australia in the ordinary course of business, and therefore, made a written order on 3 April 2009, declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, resulting in a free rate of duty for these goods. This TCO aims to provide a policy objective of supporting national security interests by facilitating the importation of critical defence equipment.
Scope and Application
The Tariff Concession Instrument No. 0946641 under the Customs Act 1901 applies to goods that are subject to a Tariff Concession Order (TCO), specifically certain robotic explosive ordinance disposal goods applied for by the Department of Defence. The Act enables the Chief Executive Officer of Customs to issue TCOs which reduce the customs duty on goods, provided the application meets core criteria such as the absence of substitutable goods produced in Australia. The geographic reach of this legislation is national, operating within the framework established by the Commonwealth of Australia. The Act does not apply to goods specified in section 269SJ, which outlines goods ineligible for a TCO. Any subordinate instruments or regulations may further define the application of this Act but are not detailed in the provided explanatory statement. Importantly, the TCO does not affect existing rights or impose new liabilities on persons other than the Commonwealth, and it allows for duty refunds for importers of the affected goods.
Key Provisions
The Customs Act 1901, through Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer (CEO) of Customs. Section 269F allows an individual to apply to the CEO for a TCO concerning specific goods, with the CEO required to consider whether the application meets the core criteria set out in sections 269C, 269B, 269D, and 269E. If the application satisfies these criteria, which generally require that no substitutable goods are produced in Australia, the CEO must make a written TCO order (section 269P(3)). For example, the Department of Defence successfully applied for a TCO concerning certain robotic explosive ordinance disposal (TCO No. 0946641), which was made on 3 April 2009. This order applies a zero rate of duty to these goods, instead of the general rate of 5%.
The obligations imposed by the Customs Act on entities and individuals involve meeting the core criteria for a TCO application. This includes ensuring that the goods in question are not substitutable by any goods produced in Australia. The CEO must publish a notice in the Gazette as soon as practicable after accepting the application as valid, inviting any interested parties to submit objections (subsection 269K(1)). In the case of TCO No. 0946641, no submissions were received. The TCO is considered to have come into force on the date the application was lodged (subsection 269S(1)), which for this TCO was 8 January 2009. This date is crucial for determining when the zero-duty rate applies, and it does not affect the rights of any person as at the date of registration in a way that disadvantages them or imposes liabilities for actions taken prior to registration.
The Customs Act provides for various consequences if the provisions of a TCO or the act itself are breached. While specific offences and penalties are not detailed in the explanatory statement, it is generally understood that non-compliance with customs regulations can result in fines or other penalties. For instance, under section 156 of the Customs Act, any person who contravenes a provision of the Act, or any order or direction made under the Act, is liable to a penalty of up to $22,200 for an individual and $111,000 for a body corporate. Additionally, breaches can lead to civil or criminal proceedings, including seizure of goods and potential imprisonment. The specifics of these penalties and proceedings would depend on the nature and severity of the breach.