EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1014956
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.
Rate Australia applied for a TCO in respect of certain aeroplane passenger boarding bridges on 26 March 2010.
Instrument
TCO No 1014956 was made on 18 June 2010. It declares that those certain aeroplane passenger boarding bridges 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. 1014956 is taken to have come into force on 26 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 to regulate the importation of goods into Australia, including the imposition of customs duty. The Act provides a framework for the Chief Executive Officer of Customs to grant tariff concession orders (TCOs) that reduce or eliminate customs duty on certain goods, provided specific criteria are met. Enacted by the Australian Parliament, the Customs Act 1901 aims to facilitate trade and ensure the efficient collection of customs revenue. The policy objective behind the introduction of TCOs is to provide relief from customs duty on imported goods that are not produced domestically, thereby supporting industries that rely on imported inputs and promoting competitive pricing for consumers. The explanatory statement outlines the process for applying for and granting TCOs, ensuring transparency and allowing for public consultation on applications.
Scope and Application
The Customs Act 1901 applies to any person or entity seeking a Tariff Concession Order (TCO) for goods, ensuring that these orders are subject to specific criteria and processes. The Act specifically applies to goods that are not specified in section 269SJ, which outlines those goods that cannot be subject to a TCO. The geographic reach of this legislation is national, as it is administered by the Chief Executive Officer of Customs under the Commonwealth of Australia. The Act allows for the application of lower rates of customs duty on goods subject to a TCO, provided that no substitutable goods are produced in Australia in the ordinary course of business. The application process includes a public notification in the Gazette, inviting submissions from any person who may have concerns about the TCO. The TCO itself is effective from the date the application is lodged and does not affect existing rights or impose new liabilities on persons other than the Commonwealth.
Section 269C of the Act stipulates the core criteria for a TCO, focusing on the absence of substitutable goods produced in Australia at the time of application. The CEO is mandated to make a written order if the application meets these criteria. The scope of the Act extends to the creation of subordinate instruments to further define terms such as 'substitutable goods' and 'ordinary course of business', thereby providing a comprehensive framework for tariff concessions. This mechanism facilitates the importation of specific goods, such as certain aeroplane passenger boarding bridges, at reduced duty rates, benefiting importers by potentially allowing them to apply for duty refunds on such goods imported since the TCO came into effect.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 1014956 under the Customs Act 1901 (section 269F) allow for the application for a Tariff Concession Order (TCO) in respect of certain goods, in this case, aeroplane passenger boarding bridges. If the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria, as outlined in section 269C, they must make a written order that declares the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. In this instance, item 50 of Schedule 4 applies, resulting in a duty rate of free, as opposed to the general rate of 5%.
The obligations imposed by the Act on the parties involved are primarily on the CEO of Customs, who must ensure that the application for a TCO meets the core criteria as specified in section 269C. This involves confirming that no substitutable goods were produced in Australia on the day the application was lodged. Furthermore, the CEO is required to publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to lodge a submission. In this case, no submissions were received.
Breach of the provisions of the Customs Act 1901 or the regulations can lead to civil or criminal consequences. Under section 280 of the Customs Act, any person who wilfully or recklessly contravenes a provision of the Act or the regulations is liable to a penalty not exceeding the greater of 10,000 penalty units or three times the value of the goods in respect of which the offence was committed. For companies, the maximum penalty can be up to 50,000 penalty units. Additionally, section 282 of the Act provides that any person who knowingly makes a false or misleading statement in an application for a TCO is liable to a penalty not exceeding the greater of 10,000 penalty units or three times the value of the goods in respect of which the offence was committed. These penalties underscore the importance of compliance with the Act and its regulations.