EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1036614
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 1036614 was made on 25 October 2010. It declares that those certain tripods or monopds 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. 1036614 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 Commonwealth Parliament, provides a framework for the regulation of customs and excise in Australia. Specifically, Part XVA of the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, offering a lower rate of customs duty on certain goods. This legislative instrument was introduced to address the gap in providing tariff concessions for goods that are not produced domestically, thereby facilitating trade and potentially reducing costs for importers. The primary policy objective is to support the importation of goods where there are no substitutable Australian-made alternatives, thus encouraging trade and economic efficiency. Maxwell International Australia Pty Ltd's application for a TCO for certain tripods or monopods exemplifies this process, where the CEO determined that no substitutable goods were produced in Australia, leading to the granting of a TCO that resulted in a duty-free rate for these goods.
Scope and Application
The Tariff Concession Instrument No. 1036614, made under the Customs Act 1901, applies specifically to certain tripods or monopods imported into Australia. The instrument grants a tariff concession order, reducing the customs duty on these goods from the general rate of 5% to free. This concession is applicable to goods specified in the application submitted by Maxwell International Australia Pty Ltd on 10 August 2010, and the order was issued on 25 October 2010 by the Chief Executive Officer of Customs (CEO) after determining that no substitutable goods were produced in Australia. The concession order is effective from the date of the application, 10 August 2010, and does not affect any rights or liabilities of persons other than the Commonwealth with respect to actions taken prior to the order’s registration. Importers of these goods may benefit from this concession by applying for a refund of duty paid on imports made since the effective date of the concession order.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 1036614 pertain to the Customs Act 1901 and the Customs Tariff Act 1995. Section 269F of the Customs Act 1901 outlines the process for applying for a Tariff Concession Order (TCO). Section 269C sets out the criteria that must be met for a TCO application to be considered, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P(3) mandates that if these criteria are met, the Chief Executive Officer (CEO) of Customs must issue a written TCO.
In terms of obligations and requirements, the Customs Act 1901 places several duties on the CEO of Customs. Upon receiving a TCO application, the CEO must assess whether it meets the core criteria as per section 269C. If satisfied, the CEO must issue a TCO as per section 269P(3). Additionally, under section 269K(1), the CEO must publish a notice in the Gazette, inviting any interested parties to submit objections to the TCO if they believe it should not be made. In this instance, no submissions were received, allowing the TCO to proceed.
Breach of the provisions set out in the Customs Act 1901 and the Customs Tariff Act 1995 can lead to significant consequences. While the explanatory statement does not specify particular offences related to the TCO, general breaches of the Customs Act 1901 can result in both civil and criminal penalties. Civil penalties can include fines of up to $22,200 per offence for individuals and $111,000 for corporations. Criminal penalties can result in imprisonment for up to five years, or both for individuals, and a fine of up to $222,000 for corporations. These penalties are designed to ensure compliance with the Act and the proper administration of customs duties and tariff concessions.