EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1014657
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 float switches on 25 March 2010.
Instrument
TCO No 1014657 was made on 08 July 2010. It declares that those certain float switches 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. 1014657 is taken to have come into force on 25 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 was enacted by the Parliament of Australia to provide for the regulation of customs and excise, including the imposition of customs duty on imported goods. The Act was introduced to address the need for a comprehensive framework governing the customs process in Australia, ensuring the efficient and effective administration of customs duties and the regulation of imports and exports. Tariff Concession Orders (TCOs) were introduced as a mechanism to provide relief from customs duties on certain goods under specific circumstances. This legislative instrument aims to streamline the process of applying for and granting tariff concessions, facilitating trade by reducing the duty burden on eligible goods.
On 8 July 2010, Tariff Concession Instrument No. 1014657 was made under the Customs Act 1901, following an application by Bob Littler Agencies for a TCO in respect of certain float switches. The Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, meeting the core criteria for a TCO. Consequently, the instrument declares that the specified float switches are subject to a duty rate of free, as opposed to the general rate of 5%. The TCO came into effect on the date the application was lodged, 25 March 2010, and does not adversely affect the rights of any person or impose new liabilities. Importers of these goods can apply for a refund of duty paid on imports since the TCO's effective date.
Scope and Application
The Customs Act 1901 applies to individuals and entities involved in the importation of goods into Australia, including importers, manufacturers, and distributors, by providing a framework for the assessment and collection of customs duty. The Act authorises the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) to provide lower rates of customs duty on specified goods under certain conditions. The scope of this legislation is national, operating under the Commonwealth jurisdiction. It excludes goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The application of the Act may be extended or restricted through subordinate instruments, such as regulations and orders, which provide further detail on the application of the Act’s provisions. For example, the Customs Tariff Act 1995, which is referenced in the Act, schedules the duty rates applicable to various goods. In the case of Tariff Concession Instrument No. 1014657, the Act applies to float switches and allows for a concessional rate of duty, which was implemented from the date the application was lodged, 25 March 2010.
Key Provisions
The primary sections of Tariff Concession Instrument No. 1014657, as referenced under the Customs Act 1901, include section 269F (which outlines the process for applying for a Tariff Concession Order), section 269C (which sets the criteria that an application must meet to be considered valid), and section 269SJ (which lists goods that cannot be subject to a Tariff Concession Order). The instrument specifically declares that certain float switches are subject to a zero-rate duty under item 50 of Schedule 4 to the Customs Tariff Act 1995, effective from the date the application was lodged. This instrument was published in the Gazette on 8 July 2010, inviting any interested parties to submit objections, none of which were received.
The obligations imposed on the parties governed by this Act include the requirement for any person wishing to apply for a Tariff Concession Order to submit an application to the Chief Executive Officer of Customs. The CEO is mandated to assess whether the application meets the core criteria, which involves determining whether substitutable goods are produced in Australia at the time the application is made. If the CEO is satisfied that no such goods are produced, they must then make a written order declaring that the specified goods are subject to the Tariff Concession Order. Furthermore, the CEO must publish a notice in the Gazette once an application is accepted as valid, inviting any objections or submissions from interested parties.
In the case of Tariff Concession Instrument No. 1014657, the CEO made the order on 8 July 2010, following Bob Littler Agencies' application for a Tariff Concession Order on 25 March 2010. Since no objections were received, the CEO proceeded to make the order, effective from the date of the application. Importers of these float switches can benefit from this concession by applying for a refund of duty on goods imported since the effective date of the TCO.
The Customs Act 1901 also outlines the consequences for breaches related to Tariff Concession Orders. While the explanatory statement does not specify penalties for breaches in this particular context, general provisions in the Act may include civil or criminal penalties for non-compliance, depending on the severity and intent of the breach. These penalties could range from fines to imprisonment, depending on the specific circumstances and the discretion of the court. The Act ensures that the rights of third parties are not adversely affected by the TCO, thereby providing a clear legal framework for the administration of tariff concessions.