EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1010227
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.
Ipd Group applied for a TCO in respect of certain fuse holders or fuse bases on 26 February 2010.
Instrument
TCO No 1010227 was made on 21 May 2010. It declares that those certain fuse holders or fuse bases 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. 1010227 is taken to have come into force on 26 February 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 Customs Act 1901 was enacted by the Australian Parliament to regulate the import and export of goods, including the imposition and remission of customs duties. A particular focus of the Act is the ability of the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) to provide tariff concessions on specific goods under certain conditions. In 2010, Tariff Concession Instrument No. 1010227 was introduced to address the need for a tariff concession on certain fuse holders or fuse bases, following an application by Ipd Group. This instrument was enacted to ensure that these goods, which are not produced in Australia, benefit from a reduced customs duty rate, thereby encouraging their importation and use in the Australian market without imposing any disadvantage or liability on importers or other stakeholders. The policy objective aligns with the Act's broader goal of facilitating efficient trade practices while ensuring appropriate tariff measures are in place.
Scope and Application
The Tariff Concession Instrument No. 1010227, under the Customs Act 1901, applies to the specific goods, namely certain fuse holders or fuse bases, as requested by Ipd Group. The application of this instrument is contingent on the Chief Executive Officer of Customs being satisfied that no substitutable goods are produced in Australia in the ordinary course of business, which is a condition set out in the Act. This instrument provides for a lower rate of customs duty for the specified goods, with the general duty rate being 5% and the duty rate for goods under this concession being free. The instrument is applicable across the Commonwealth of Australia and its provisions are established to benefit importers by potentially allowing them to claim a refund of duty on the specified goods imported since the effective date of the instrument. The instrument does not impose any liabilities or disadvantage any person other than the Commonwealth, and it came into effect on the date the application was lodged, 26 February 2010.
Key Provisions
The primary operative sections of this legislation pertain to Tariff Concession Orders (TCOs) under the Customs Act 1901 (section 269F). An application for a TCO can be submitted to the Chief Executive Officer of Customs (CEO) if the goods in question do not fall under the exclusions listed in section 269SJ. The CEO must assess whether the application meets the core criteria outlined in sections 269C, 269B, and 269D. If satisfied, the CEO is required to make a written order declaring that the specified goods are subject to a prescribed tariff item, thereby applying a lower rate of customs duty or, in this case, making the duty free (section 269P(3)).
The Act imposes several obligations on the parties involved. The CEO must publish a notice in the Gazette inviting submissions from any interested parties if they believe the TCO should not proceed (subsection 269K(1)). In this case, no submissions were received. Additionally, the TCO does not affect the rights of any person other than the Commonwealth as at the date of registration, nor does it impose any liabilities on any person (subsection 269S(1)). Importers, however, can benefit by applying for a refund of duty on goods imported since the TCO was deemed to come into effect.
The legislation also details the potential consequences of breaches. While specific offences and penalties are not outlined within the explanatory statement, breaches of the Customs Act 1901 can generally lead to civil or criminal penalties. For example, knowingly making a false statement in an application can result in fines and imprisonment. The maximum penalties for such offences can vary, but they often include substantial fines up to several thousand dollars and potential imprisonment terms depending on the severity of the breach. The specifics of penalties would be found in other sections of the Customs Act or related legislation.