EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1014408
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.
Bob Littler Agencies applied for a TCO in respect of certain boat steering wheels on 24 March 2010.
Instrument
TCO No 1014408 was made on 11 June 2010. It declares that those certain boat steering wheels 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. 1014408 is taken to have come into force on 24 March 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, enacted by the Australian Parliament, establishes a framework for the imposition and collection of customs duties, including the ability to grant tariff concessions on specific goods through Tariff Concession Orders (TCOs). These concessions are intended to alleviate the financial burden on businesses and consumers by providing lower rates of duty for certain imported goods, provided they meet specific criteria, such as the absence of substitutable goods produced in Australia. This legislative instrument aims to address economic and competitive challenges faced by Australian businesses by ensuring that they are not unduly disadvantaged by the imposition of customs duties on certain imported goods. Tariff Concession Instrument No. 1014408, issued on 11 June 2010, exemplifies this process by granting a tariff concession on certain boat steering wheels, thereby setting their duty rate at free, following an application by Bob Littler Agencies. This legislative measure was designed to support the Australian industry by reducing the cost of importing these specific goods, thereby promoting economic efficiency and fairness in trade practices.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCO) mechanism, provides a pathway for the reduction or exemption of customs duty on specific goods, contingent upon certain criteria being met. The Act applies to individuals or entities seeking to import goods that are not produced domestically in the ordinary course of business, and the geographic scope of this Act is national, as it operates under the authority of the Commonwealth. The Act excludes certain goods specified under section 269SJ, which cannot be the subject of a TCO. The process for applying for a TCO involves submitting an application to the Chief Executive Officer of Customs, who then evaluates the application against the core criteria outlined in the Act. Once a TCO is made, it applies to the goods from the date the application was lodged, as per the Act's provisions, and benefits importers by potentially reducing their duty liabilities. Importantly, the TCO does not retroactively disadvantage any person or impose liabilities for actions taken before the order's effective date.
Key Provisions
The Tariff Concession Order No. 1014408, as established under the Customs Act 1901 (sections 269C and 269P), provides a concession on the customs duty for certain boat steering wheels. This concession was granted because the Chief Executive Officer of Customs determined that no substitutable goods were being produced in Australia at the time of the application. The normal customs duty rate of 5% was thus waived, rendering the duty free for these specific goods. This concession applies to goods specified in item 50 of Schedule 4 to the Customs Tariff Act 1995, and it is effective from the date the application was lodged, which was 24 March 2010.
The Act imposes several obligations on the parties involved. Firstly, any person wishing to apply for a Tariff Concession Order (TCO) must ensure their application meets the core criteria set out in the Act. Specifically, the applicant must demonstrate that no substitutable goods were produced in Australia at the time of the application (section 269C). Furthermore, upon receiving a valid application, the Chief Executive Officer of Customs must publish a notice in the Gazette inviting any interested parties to submit objections or submissions (subsection 269K(1)). If no submissions are received, the CEO proceeds to make the TCO. Additionally, importers of the specified goods can apply for a refund of duty paid on those goods imported since the effective date of the TCO (subsection 126(1)(r) of the Regulations).
Breaching the conditions set by the Customs Act 1901 or failing to comply with the requirements for a Tariff Concession Order can result in various legal consequences. While the Explanatory Statement does not detail specific offences or penalties for non-compliance with the TCO, general penalties under the Customs Act may apply. For example, making a false statement in an application can lead to fines or imprisonment, with penalties varying depending on the severity of the offence. Additionally, failure to comply with refund processes or other related requirements might incur administrative penalties. The exact penalties would depend on the specific breach and the relevant sections of the Act or associated Regulations.