EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1031198
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.
Maxwell International Australia applied for a TCO in respect of certain tripods or monopods on 08 July 2010.
Instrument
TCO No 1031198 was made on 06 October 2010. It declares that those certain tripods or monopods 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. 1031198 is taken to have come into force on 08 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 Parliament of Australia, provides a framework for the regulation of customs and excise duties, including the establishment of a scheme for Tariff Concession Orders (TCOs). These orders allow for the application of lower rates of customs duty on specified goods. The Customs Act 1901, particularly Part XVA, empowers the Chief Executive Officer of Customs (CEO) to make these orders based on applications from interested parties, provided the goods do not fall under the categories excluded by section 269SJ. The core criteria for approving a TCO, as outlined in section 269C, require that no substitutable goods are produced in Australia at the time of the application. In the case of Tariff Concession Order No. 1031198, issued on 06 October 2010, the CEO determined that certain tripods or monopods met these criteria, resulting in the application of a free duty rate instead of the general 5% rate. This legislative instrument ensures that importers of these goods can benefit from reduced customs duties, aligning with the policy objective of facilitating trade by providing tariff concessions where appropriate.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the application of Tariff Concession Orders (TCOs) to reduce the customs duty on particular goods. A TCO can be applied for by any person, and if the Chief Executive Officer (CEO) of Customs is satisfied that the application is valid and the goods specified are not those listed in section 269SJ of the Act, which includes goods that cannot be subject to a TCO, the CEO will consider whether the application meets the core criteria. These criteria include ensuring that no substitutable goods are produced in Australia in the ordinary course of business at the time the application is lodged. Once a TCO is made, the goods specified in the order are subject to a lower rate of duty as outlined in the Customs Tariff Act 1995. The TCO does not retroactively affect the rights of any person and does not impose any liabilities on individuals other than the Commonwealth, providing beneficial rights to importers who can apply for a refund of duty on goods imported since the effective date of the TCO. The TCO extends nationally within the Commonwealth of Australia, covering all entities and individuals involved in the importation of the specified goods.
Key Provisions
The Customs Act 1901, specifically under Part XVA, details the process for the creation of Tariff Concession Orders (TCOs) (s 269F). An individual or entity may apply to the Chief Executive Officer of Customs (CEO) for a TCO for certain goods, with the aim of having a lower rate of customs duty applied to those goods. The CEO must determine whether the application meets the core criteria, which includes ensuring that no substitutable goods are produced in Australia on the day the application is lodged (s 269C). If the application satisfies these criteria, the CEO must issue a written TCO (s 269P(3)). This process was followed in the case of Maxwell International Australia’s application for TCO No 1031198 concerning certain tripods or monopods, which was made on 6 October 2010.
The Act imposes several obligations on the parties involved. The CEO must review the application to ensure it meets the core criteria, which involves verifying that no substitutable goods are produced in Australia on the application date (s 269C). The CEO must also publish a notice in the Gazette inviting submissions from any interested parties, although in the case of TCO No 1031198, no submissions were received (s 269K(1)). Additionally, the TCO must be issued if the core criteria are met, and the TCO will apply from the date the application was lodged (s 269S(1)). This means that any importer of the specified goods after the effective date can benefit from the reduced duty rate and may apply for a refund of any duty paid before the TCO came into effect (Reg 126(1)(r)).
Failure to comply with the requirements of the Act or the TCO can lead to various consequences. If a person imports goods subject to a TCO without adhering to the reduced duty rate, they may be liable to pay the difference in duty rates. Additionally, any misrepresentation or incorrect information provided in the application process could be subject to penalties under other sections of the Customs Act or related legislation. The specific penalties for such breaches are not detailed in the explanatory statement but could include fines or other sanctions under the relevant Acts.
The TCO itself does not disadvantage any person other than the Commonwealth and does not impose any new liabilities on any individual or entity. It specifically ensures that the rights of importers are beneficially affected, allowing them to apply for refunds of any duties paid on the goods before the TCO was issued (Reg 126(1)(r)). The rights of non-Commonwealth entities as at the date of the TCO registration remain unaffected. This provision ensures that the TCO operates within the legislative framework to provide tariff benefits without imposing undue burdens or liabilities on non-government parties.