EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1028254
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 accumulators on 24 June 2010.
Instrument
TCO No 1028254 was made on 13 September 2010. It declares that those certain accumulators 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. 1028254 is taken to have come into force on 24 June 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. 1028254, enacted under the Customs Act 1901, was introduced to address the need for tariff concessions for specific goods, in this case certain accumulators, by the Chief Executive Officer of Customs. This legislation was enacted to ensure that the application for such concessions adheres to the core criteria outlined in the Act, specifically under sections 269C and 269P(3). The instrument, published in the Gazette as required by the Act, allows for a lower rate of customs duty for goods not produced domestically and deemed substitutable, thus fostering trade and economic efficiency. The instrument, which came into effect on the date of application, 24 June 2010, ensures that the rights of importers are protected and may benefit from duty refunds, while not imposing any liabilities on other parties.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the scheme through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). These orders apply to goods for which a lower rate of customs duty is specified. A person may apply for a TCO, provided the goods in question are not among those listed in section 269SJ of the Act, which are ineligible for tariff concessions. The CEO must assess whether the application meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia at the time of application, as defined in section 269D and 269E. If these conditions are satisfied, the CEO issues a TCO, specifying the applicable tariff item under Schedule 4 of the Customs Tariff Act 1995. This instrument has a national jurisdictional reach, applying across Australia. The Tariff Concession Instrument No. 1028254, made in 2010, is an example of this process, applying to certain accumulators and setting the duty rate at zero, down from the general rate of 5%. The instrument came into force on the date of application and does not retroactively disadvantage or impose liabilities on any person, while providing benefits to importers who can seek duty refunds for goods imported since the TCO's effective date.
Key Provisions
The key provisions of Tariff Concession Instrument No. 1028254 under the Customs Act 1901 (the Act) primarily revolve around the creation and application of Tariff Concession Orders (TCOs) (section 269F). Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of specific goods. If the CEO determines that the application does not pertain to goods that are explicitly excluded from TCOs under section 269SJ, the CEO must then assess whether the application meets the core criteria outlined in section 269C. A TCO application meets these criteria if, on the date of submission, no substitutable goods were produced in Australia in the ordinary course of business.
The obligations imposed by the Act on the parties and entities it governs include the requirement for the CEO to meticulously evaluate each TCO application against the core criteria (section 269C). The CEO must ensure that the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business. Additionally, section 269K mandates that the CEO publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting any interested parties to submit their views on why the TCO should not be made.
Failure to adhere to the provisions of the Act can result in significant consequences. While the Act does not explicitly detail offences or penalties for breaches, any non-compliance with the stipulated procedures for applying for or processing a TCO could potentially lead to legal challenges or disputes. Given the nature of the Act, any breaches may be subject to the general enforcement mechanisms available under the Customs Act 1901, which could include civil or criminal penalties, depending on the severity of the breach. However, the specific penalties are not detailed in the explanatory statement provided.