EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1036612
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 Pty Ltd applied for a TCO in respect of certain tripods or monopods on 10 August 2010.
Instrument
TCO No 1036612 was made on 25 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. 1036612 is taken to have come into force on 10 August 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 imports and exports through the imposition of customs duty. To address the need for tariff concessions that encourage the import of goods that are not domestically produced, Part XVA of the Act enables the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs). These orders reduce the rate of customs duty on specified goods if certain criteria are met, including the absence of substitutable goods produced in Australia. This legislative approach aims to facilitate trade by making certain imported goods more affordable and accessible. The explanatory statement accompanying Tariff Concession Instrument No. 1036612 details a specific instance where the CEO approved a TCO for certain tripods or monopods, reducing their customs duty rate from 5% to free, thereby benefiting importers who may apply for duty refunds on goods imported since the effective date of the TCO.
Scope and Application
The Tariff Concession Instrument No. 1036612 under the Customs Act 1901 provides a mechanism for the Chief Executive Officer of Customs to offer tariff concessions on certain goods, in this case, specific tripods or monopods, by way of a Tariff Concession Order (TCO). This instrument applies to Maxwell International Australia Pty Ltd, the applicant, and to any importers of the specified tripods or monopods who benefit from the reduced customs duty rate. The geographic reach of the Act is national, given its Commonwealth jurisdiction. The application of the Act does not extend to goods specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The Act allows for the use of subordinate instruments to extend or restrict its application, though specific details on such instruments are not provided in the explanatory statement. The TCO is effective from the date of the application, in this instance, 10 August 2010, and does not retroactively affect the rights of any person other than the Commonwealth, ensuring that no existing liabilities or disadvantages are imposed on those who have already imported the goods before the TCO was registered.
Key Provisions
The Tariff Concession Order (TCO) No. 1036612, made under section 269F of the Customs Act 1901, is primarily concerned with the application of a lower rate of customs duty to certain tripods or monopods (section 269P(3)). This instrument was made on 25 October 2010, in response to an application by Maxwell International Australia Pty Ltd on 10 August 2010. The CEO was satisfied that these goods were not substitutable by any goods produced in Australia, which is a core criterion under section 269C. As a result, the goods are subject to a prescribed tariff item in Schedule 4 to the Customs Tariff Act 1995, with the duty rate being reduced from the general rate of 5% to free. This concession is effective from the date the application was lodged, which is 10 August 2010, in accordance with subsection 269S(1).
The obligations under this Act require applicants to demonstrate that the goods in question are not substitutable by any Australian-produced goods, and that they meet the criteria set out in section 269C. The CEO has the duty to assess these applications against these criteria and, if satisfied, to issue a TCO. The CEO must also publish a notice in the Gazette inviting submissions from interested parties, although in this case, no submissions were received (subsection 269K(1)). The TCO applies only to goods imported after the effective date and does not affect the rights of any person with respect to actions taken prior to this date. Importers of the affected goods can apply for a refund of any duty paid on goods imported since the effective date of the TCO.
Breaching the requirements set out in the Customs Act 1901 can have significant legal consequences. For instance, if an entity provides false information in an application for a TCO, they could be subject to civil or criminal penalties. Under section 269L of the Act, a person who makes a false statement in an application for a TCO is liable for a penalty of up to 10,000 penalty units, which currently equates to approximately AUD 1.7 million. Additionally, under section 283-5 of the Crimes Act 1914, any person who knowingly or recklessly makes a false statement in connection with the administration of the Customs Act can be subject to criminal prosecution. The maximum penalty for such an offence can include imprisonment for up to 10 years, reflecting the seriousness of the breach. These provisions underscore the importance of compliance with the Act's requirements.