EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1030416
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.
Auto Control Doors applied for a TCO in respect of certain dc motors on 06 July 2010.
Instrument
TCO No 1030416 was made on 20 September 2010. It declares that those certain dc motors 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. 1030416 is taken to have come into force on 06 July 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 Commonwealth Parliament, establishes a framework for the regulation of imports and exports in Australia. Specifically, Part XVA of the Act facilitates the application for Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders provide a lower rate of customs duty for certain goods, subject to specific criteria outlined in the Act. Tariff Concession Instrument No. 1030416, issued on 20 September 2010, is a practical application of this scheme. The policy objective is to support Australian businesses by reducing the cost of importing specific goods, thereby enhancing their competitiveness. The instrument was introduced in response to an application from Auto Control Doors for a TCO on certain dc motors, which was approved because no substitutable goods were being produced in Australia, meeting the core criteria specified in section 269C of the Act.
Scope and Application
The Customs Act 1901 applies to any person or entity that imports goods into Australia and seeks to avail themselves of the benefits of a Tariff Concession Order (TCO). Specifically, this Act is concerned with the regulation of customs duty on imported goods, providing a mechanism whereby certain goods may be subject to a lower rate of duty if they meet specified criteria. The Act allows the Chief Executive Officer of Customs to issue a TCO, which can be applied for by any person, provided the goods in question are not specified in section 269SJ of the Act, which lists goods that are ineligible for tariff concessions. The TCO applies to the goods for which it is made, and in the case of TCO No. 1030416, it concerns certain dc motors that are subject to a free rate of duty under item 50 of Schedule 4 to the Customs Tariff Act 1995. This Act has a national reach, as it is a Commonwealth statute, and applies across all states and territories of Australia. The Act does not specify exclusions, exemptions, or thresholds beyond those outlined in the legislation itself, such as the ineligibility of certain goods as mentioned. The scope of the Act can be extended through subordinate instruments, which may provide further details on the application and administration of TCOs.
Key Provisions
The primary sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCO) include sections 269C, 269F, 269P, and 269SJ (subsections 269P(3) and 269S(1)). Section 269F allows any person to apply to the Chief Executive Officer (CEO) of Customs for a TCO. If the application is not for goods specified in section 269SJ, which lists goods ineligible for TCO, the CEO must evaluate if the application meets the core criteria as outlined in section 269C. This evaluation hinges on whether, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. If the application meets these criteria, the CEO must issue a written order (section 269P(3)) declaring that the goods in question are subject to a prescribed tariff item, thereby applying a specified rate of duty, which can be zero if the goods are duty-free.
Entities or individuals applying for a TCO must ensure their application aligns with the criteria set out in the Customs Act 1901. They need to provide sufficient evidence that no substitutable goods are produced in Australia in the ordinary course of business. The CEO must also take steps to publish a notice in the Gazette inviting any person to lodge a submission if they believe the TCO should not be made. This requirement is detailed in subsection 269K(1) and ensures transparency and opportunity for public consultation. In the case of Tariff Concession Order No. 1030416, the CEO did not receive any submissions against the application, allowing the order to proceed.
Breaching the requirements of the Customs Act 1901 or misapplying for a TCO could result in penalties. Although the specific penalties are not detailed in the explanatory statement, breaches of the Customs Act generally can lead to both civil and criminal consequences. Civil penalties may include fines, while criminal penalties could involve imprisonment. The exact penalties depend on the nature and severity of the breach, as defined by other relevant sections of the Customs Act and associated regulations. For example, knowingly providing false information in an application could be prosecuted under criminal law, leading to fines and/or imprisonment, while failure to comply with tariff regulations could result in civil penalties, including financial penalties and the potential for customs seizures.