EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1017261
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.
Exide Australia Pty Ltd applied for a TCO in respect of certain accumulator cells on 14 April 2010.
Instrument
TCO No 1017261 was made on 02 July 2010. It declares that those certain accumulator cells 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. 1017261 is taken to have come into force on 14 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 Parliament of Australia, provides a framework for the application of customs duties on imported goods. In particular, Part XVA of the Act allows for Tariff Concession Orders (TCOs), which can reduce the rate of customs duty on specified goods if certain criteria are met. The Tariff Concession Instrument No. 1017261, issued on 2 July 2010, applies this mechanism to certain accumulator cells, setting their duty rate at free, down from the general rate of 5%, following an application by Exide Australia Pty Ltd on 14 April 2010. This instrument was created after the Chief Executive Officer of Customs determined that no substitutable goods were being produced in Australia, satisfying the core criteria outlined in the Act. The policy objective of this instrument is to facilitate the import of goods by reducing customs duty, thereby potentially lowering costs for importers and encouraging the import of necessary goods.
Scope and Application
The Tariff Concession Instrument No. 1017261 under the Customs Act 1901 applies to Exide Australia Pty Ltd, specifically in relation to certain accumulator cells. This Instrument, which was issued on 2 July 2010, follows an application made by Exide Australia on 14 April 2010. It pertains to the customs duty rate applicable to these goods, reducing the general rate of 5% to zero, thereby providing a tariff concession. This concession applies to goods specified in item 50 of Schedule 4 to the Customs Tariff Act 1995. The Instrument was made pursuant to the core criteria set out in section 269C of the Customs Act, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. The instrument is effective from the date the application was lodged, 14 April 2010, and does not disadvantage any person by affecting their rights as at the date of registration or imposing any liabilities in respect of actions taken prior to registration. The instrument extends to the national level, applying across Australia as a Commonwealth measure.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1017261 pertain to the process of applying for and making a Tariff Concession Order (TCO) under the Customs Act 1901 (the Act). Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods, provided these goods are not specified in section 269SJ, which lists those goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria set out in section 269C, they must make a written order (a TCO) declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (subsection 269P(3)). In this specific case, Exide Australia Pty Ltd applied for a TCO in respect of certain accumulator cells, and TCO No. 1017261 was made on 2 July 2010, declaring that these cells are goods to which item 50 of Schedule 4 to the Tariff applies, with a duty rate of free as opposed to the general rate of 5%.
The Act imposes several obligations and requirements on the parties involved. The CEO is required to ensure that the application for a TCO does not pertain to goods specified in section 269SJ. If the CEO is satisfied that the application meets the core criteria, they must make a TCO and publish a notice in the Gazette, inviting any person who believes the TCO should not be made to lodge a submission with the CEO (subsection 269K(1)). In this instance, no submissions were received in response to the published notice. Furthermore, a TCO is deemed to have come into force on the day the application for the TCO was lodged (subsection 269S(1)). This means TCO No. 1017261 is considered to have come into force on 14 April 2010.
The legislation also outlines the consequences of breaches, although specific offences and penalties are not detailed in the explanatory statement. Under the Customs Act 1901, any breaches of the conditions set by the TCO or any fraudulent claims for tariff concessions could potentially lead to legal consequences. The Act may provide for civil or criminal penalties, but the explanatory statement does not specify the exact nature of these penalties. Importers, however, stand to benefit from the TCO, as they can apply for a refund of duty on goods imported since the TCO came into force, under paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any liabilities on any person and does not affect the rights of a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration.