EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1000942
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.
Robert Bosch Aust Pty Ltd applied for a TCO in respect of certain alternators on 06 January 2010.
Instrument
TCO No 1000942 was made on 22 March 2010. It declares that those certain alternators 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. 1000942 is taken to have come into force on 06 January 2010.
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 Tariff Concession Instrument No. 1000942, enacted in 2010 under the Customs Act 1901, addresses the issue of providing tariff concessions for specific goods not produced in Australia. This instrument was introduced to streamline the process for applying for tariff concessions, ensuring that the Chief Executive Officer of Customs can efficiently assess and approve applications based on the criteria set out in the Act. The primary objective of this legislation is to facilitate reduced customs duty rates for goods that do not have Australian-made alternatives, thereby potentially lowering costs for importers and enhancing competitive advantages for imported goods in the market. This approach is in line with the broader policy objective of supporting trade and economic efficiency by making imported goods more affordable without disadvantaging existing stakeholders or imposing new liabilities.
Scope and Application
The Customs Act 1901, through the Tariff Concession Order No. 1000942, applies to entities or individuals involved in the importation of certain alternators, specifically those for which Robert Bosch Aust Pty Ltd applied for a tariff concession on 6 January 2010. The Act facilitates the application of a lower rate of customs duty to goods specified in a Tariff Concession Order, provided that the goods are not listed in section 269SJ as ineligible for such concessions. The order applies nationally, across all states and territories of Australia, and its issuance is contingent upon the Chief Executive Officer of Customs determining that no substitutable goods are produced in Australia. The order exempts these alternators from the general customs duty rate of 5%, imposing instead a rate of free duty. The process of issuing the order included a public notice in the Gazette, inviting submissions from interested parties, none of which were received, leading to the order’s registration on 22 March 2010, effective retroactively to the date of application. This order does not retroactively affect the rights of any person, ensuring that it does not impose liabilities on anyone for actions taken prior to its issuance.
Key Provisions
The main sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCOs) include section 269F, which allows for an application to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, and section 269C, which sets out the core criteria that must be met for a TCO application to be successful. Specifically, section 269C requires that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets these criteria, they must issue a written order declaring the goods to which the concession applies. This is detailed in section 269P(3) of the Act.
The obligations imposed on parties by the Act include the requirement for applicants to ensure their TCO applications meet the core criteria, particularly the absence of substitutable goods being produced in Australia. The CEO, on receiving an application, must consider the application against these criteria, including any submissions received from interested parties. Section 269K(1) mandates that the CEO publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be granted. Additionally, the Act ensures that the commencement of the TCO is effective from the date the application was lodged, as outlined in section 269S(1).
Failure to comply with the requirements of the Customs Act 1901 can result in various civil or criminal consequences. While the explanatory statement does not detail specific offences or penalties, breaches of customs regulations generally can attract fines and, in more serious cases, criminal charges. The maximum penalties for breaches of customs laws can include substantial fines and imprisonment, depending on the severity and intent of the breach. It is important for all parties involved to adhere strictly to the provisions of the Act to avoid such consequences.
In summary, the Tariff Concession Instrument No. 1000942 under the Customs Act 1901 establishes a process for the CEO to grant tariff concessions on certain goods, provided specific criteria are met. The Act imposes obligations on both applicants and the CEO, ensuring that the process is transparent and fair. Non-compliance can lead to civil or criminal penalties, reinforcing the importance of adhering to the legislative framework.