EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1016152
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.
Abb Australia applied for a TCO in respect of certain switchgear cabinets on 6 April 2010.
Instrument
TCO No 1016152 was made on 25 June 2010. It declares that those certain switchgear cabinets 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. 1016152 is taken to have come into force on 6 April 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, provides a framework for the administration of customs and excise duties, and includes provisions for Tariff Concession Orders (TCOs) to offer relief from certain customs duties. The Tariff Concession Instrument No. 1016152 was introduced to address the need for tariff concessions for specific goods where no substitutable goods are produced in Australia. This instrument, effective from 6 April 2010, allows for a reduction in customs duty on certain switchgear cabinets, which are now subject to a duty-free rate instead of the general rate of 5%. The instrument was made following an application by Abb Australia, and the Chief Executive Officer of Customs determined that no objections were received, thus satisfying the legislative requirements for the issuance of the concession.
Scope and Application
The Customs Act 1901, as augmented by Tariff Concession Instrument No. 1016152, pertains to the application and establishment of Tariff Concession Orders (TCO) concerning specific goods imported into Australia. The Act applies to any person or entity seeking a tariff concession for imported goods, ensuring that such applications are evaluated by the Chief Executive Officer of Customs (CEO). The Act imposes a requirement that the goods in question must not be of a type specified as ineligible under section 269SJ, and it stipulates that no substitutable goods must be produced in Australia at the time the application is lodged. This legislative framework facilitates the reduction or exemption of customs duty on specified goods, contingent upon the criteria outlined in the Act being met. The instrument and its application extend across the Commonwealth, impacting the importation duties and potentially benefiting importers by allowing them to seek refunds on duties paid before the TCO's effective date. The Act ensures that the rights of non-Commonwealth entities are not adversely affected, and no new liabilities are imposed as a result of the TCO.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 1016152 are sections 269C, 269F, and 269P(3) of the Customs Act 1901 (the Act). Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) concerning specific goods. If the CEO determines that the application does not pertain to goods specified in section 269SJ, which outlines goods ineligible for a TCO, the CEO must assess whether the application meets the core criteria, as per section 269C. This section stipulates that the application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. If the CEO is satisfied that the application meets these criteria, section 269P(3) mandates that the CEO issue a written order (a TCO), declaring the goods subject to the application as those to which a specified item of Schedule 4 to the Customs Tariff Act 1995 applies.
The Act imposes certain obligations and requirements on the parties involved. An applicant, such as Abb Australia, must submit a valid application to the CEO for a TCO concerning specific goods. The CEO has the responsibility to determine whether the application meets the core criteria and whether it pertains to goods that are ineligible for a TCO. If the CEO is satisfied that the application meets the criteria and does not involve ineligible goods, the CEO must make a written TCO order. Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette, inviting submissions from any person who believes there are reasons why the TCO should not be made. This ensures transparency and allows interested parties to voice their concerns.
In terms of offences, penalties, or civil and criminal consequences, the Customs Act 1901 does not specify particular offences directly related to the issuance of a TCO. However, breaches of other provisions within the Act may lead to civil or criminal penalties. For instance, knowingly making a false statement in an application or representation under the Act may result in penalties, including fines and imprisonment. Furthermore, failure to comply with the Customs Act or related regulations may result in financial penalties, seizure of goods, or other enforcement actions. The maximum penalties for these offences can vary depending on the specific provision breached and the severity of the offence.
The Tariff Concession Instrument No. 1016152 specifies that the TCO applies to certain switchgear cabinets, granting them a lower rate of customs duty. The CEO must ensure that the application meets the core criteria, and the absence of substitutable goods produced in Australia on the application date is a critical factor. The TCO comes into force on the date the application was lodged, and it does not disadvantage any person or impose liabilities for actions taken before the registration date. This ensures that importers can benefit from the tariff concession, including the possibility of applying for a refund of duty on goods imported since the effective date of the TCO.