EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1021697
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.
Warsash Scientific Pty Ltd applied for a TCO in respect of certain linear actuators on 14 May 2010.
Instrument
TCO No 1021697 was made on 09 August 2010. It declares that those certain linear actuators 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. 1021697 is taken to have come into force on 14 May 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 Tariff Concession Instrument No. 1021697 was introduced under the Customs Act 1901 to facilitate tariff concessions for certain goods, specifically linear actuators in this instance, in response to an application made by Warsash Scientific Pty Ltd on 14 May 2010. The instrument was enacted to address the need for a lower rate of customs duty on these goods, as determined by the Chief Executive Officer of Customs (CEO) based on the criteria set out in the Act. The CEO issued Tariff Concession Order (TCO) No. 1021697 on 9 August 2010, declaring that the goods in question are subject to a duty rate of free, down from the general rate of 5%, upon satisfaction that no substitutable goods were produced in Australia.
The Tariff Concession Orders scheme, established under Part XVA of the Customs Act 1901, allows the CEO to make orders that apply lower rates of customs duty to specific goods, provided the application meets the core criteria, including the absence of substitutable goods produced in Australia. The policy objective behind this legislative measure is to support Australian businesses by making certain goods more competitively priced, thus potentially stimulating demand and production within the local market. The commencement of the TCO aligns with the date of the application, ensuring that the benefits accrue from the moment the application was lodged.
Scope and Application
The Tariff Concession Instrument No. 1021697 applies to certain linear actuators as specified by Warsash Scientific Pty Ltd, and is a measure under the Customs Act 1901. This legislation enables the Chief Executive Officer of Customs to grant tariff concessions to certain imported goods, provided specific criteria are met, such as the absence of substitutable goods produced in Australia. The instrument specifies that the goods in question, which are certain linear actuators, are subject to a free rate of duty as opposed to the general rate of 5%. The application of this concession is national in scope, affecting all relevant goods imported into Australia. There are no stated exclusions in this particular instrument, though the Act itself excludes certain goods from being subject to a TCO. The instrument came into effect on the date the application was lodged, which was 14 May 2010, and does not retroactively affect any rights or impose liabilities on persons other than the Commonwealth.
Key Provisions
The key provisions of the Tariff Concession Instrument No. 1021697 under the Customs Act 1901 revolve around the concession of customs duty for certain linear actuators. Section 269F (1) permits an application for a Tariff Concession Order (TCO) to be made by any person to the Chief Executive Officer of Customs (CEO) if certain conditions are met. According to section 269C, the application for a TCO must meet core criteria, which primarily involves ensuring that no substitutable goods were produced in Australia on the day the application was lodged. This is defined under section 269D, which specifies the meaning of goods produced in Australia, and section 269E, which outlines the meaning of ordinary course of business. If the CEO is satisfied that the application meets these criteria, as per section 269P(3), a written order (TCO) must be made, declaring the goods subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. In this instance, the TCO No. 1021697 specifies that the certain linear actuators are subject to item 50 of Schedule 4, which imposes a free rate of duty.
The obligations imposed by the Act on the parties include the requirement for the CEO to process the application and determine whether the core criteria are met. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties who might oppose the TCO, as stipulated under section 269K(1). In this case, no submissions were received. The Act ensures that 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 any liabilities on a person other than the Commonwealth in respect of anything done or omitted to be done before the date of registration. Importers of the goods, however, will benefit from the rights to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force, as per paragraph 126(1)(r) of the Regulations.
In terms of consequences, any breach of the provisions outlined in the Customs Act 1901 may lead to various civil or criminal penalties. However, the explanatory statement for TCO No. 1021697 does not detail specific penalties for non-compliance with the TCO itself. Generally, under the Customs Act, breaches can result in fines or imprisonment, depending on the severity of the offence. The maximum penalties for customs-related offences are specified in the Customs Act and can vary significantly, depending on the nature and extent of the offence. For instance, knowingly making a false statement in a customs declaration can result in a fine of up to 10,000 penalty units or imprisonment for up to five years, or both. The exact penalties would be determined by the courts based on the circumstances of each case.