EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1034359
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.
Ceramic Fuel Cells Ltd applied for a TCO in respect of certain ac generators on 27 July 2010.
Instrument
TCO No 1034359 was made on 18 October 2010. It declares that those certain ac generators 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. 1034359 is taken to have come into force on 27 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, serves as a foundational piece of legislation governing customs duties and related matters within Australia. The Act provides a framework for the application of customs duty, including the possibility of tariff concessions for specific goods. One of the notable features of the Act is the ability for the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) which allow for lower rates of customs duty on certain goods. This legislative instrument was introduced to address the need for flexibility in customs duty rates, ensuring that certain imports can be made more affordable and competitive, thereby supporting economic activity and consumer access to goods. The policy objective behind the introduction of TCOs is to provide relief from customs duty where it is deemed that there is no local production of substitutable goods in Australia, thus encouraging import and use of those goods.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCOs), applies to individuals and entities seeking tariff concessions on goods imported into Australia. These TCOs are issued by the Chief Executive Officer of Customs under the authority granted by Part XVA of the Act. The application process is available for any person who can demonstrate that the goods they wish to import do not have substitutable equivalents produced in Australia, as per the criteria set out in the Act. The geographic reach of this legislation is national, as it applies across Australia and is administered by the Commonwealth. The Act excludes certain goods specified in section 269SJ from being subject to a TCO. Additionally, the application and issuance of TCOs are subject to the provisions of the Customs Tariff Act 1995, which defines the specific tariff classifications applicable to the goods in question. The TCOs can extend their application through subordinate instruments, ensuring flexibility in addressing specific import scenarios. Importantly, the issuance of a TCO does not retroactively affect the rights of any person, preserving existing legal positions and not imposing new liabilities.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1034359 are sections 269C, 269P, and 269S. Section 269C defines the core criteria that an application for a Tariff Concession Order (TCO) must meet, primarily focusing on the non-production of substitutable goods in Australia. Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that an application meets these core criteria, a written order must be made declaring the goods to which the TCO applies. Section 269S specifies that the TCO comes into force on the day the application is lodged.
The obligations and requirements imposed by this Act on the parties involved, particularly the CEO, include assessing applications against the core criteria outlined in section 269C. The CEO must ensure that the application is not for goods specified in section 269SJ, which are ineligible for a TCO. Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as per section 269K(1). Should no submissions be received, the CEO proceeds to make the TCO. The Act also mandates that the TCO does not disadvantage any person other than the Commonwealth or impose liabilities on any person in respect of actions taken before the registration date, as outlined in subsection 269S(1).
In terms of breaches, the Act does not explicitly outline specific offences, penalties, or civil/criminal consequences for non-compliance with the TCO provisions. However, the consequences of submitting a false application or acting contrary to the conditions of the TCO could potentially lead to legal actions under broader legislative frameworks, such as the Customs Act 1901 and the Crimes Act 1914, which cover fraudulent activities and breaches of customs laws. These actions could result in penalties that are commensurate with the severity of the offence, including fines and imprisonment. For instance, providing false information to obtain a TCO could be considered fraud, which is punishable under the Crimes Act 1914.