EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1040997
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.
Ebm Papst A&NZ Pty Ltd applied for a TCO in respect of certain motors on 03 September 2010.
Instrument
TCO No 1040997 was made on 29 November 2010. It declares that those certain 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. 1040997 is taken to have come into force on 03 September 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 Australian Parliament, established a framework for the administration of customs duties and tariffs. The Act provides the mechanism for the creation of Tariff Concession Orders (TCOs) which can reduce the duty payable on certain imported goods. Specifically, under Section 269F of the Act, a TCO can be applied for by a person, provided that the goods in question do not fall under the category of goods specified in Section 269SJ that are ineligible for tariff concessions. The policy objective behind TCOs, as stipulated in Section 269C, is to ensure that a concession is granted if no substitutable goods are produced in Australia at the time of the application. This ensures that local industries are not adversely affected by the concession. Tariff Concession Instrument No. 1040997, made under this Act, granted a tariff concession on certain motors, reducing their duty from the general rate of 5% to free, in line with item 50 of Schedule 4 to the Customs Tariff Act 1995. This measure was introduced following an application by Ebm Papst ANZ Pty Ltd on 3 September 2010, and the concession was effective from the same date.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, aimed at providing lower rates of customs duty on specified goods. This Act applies to any individual or entity that seeks to import goods eligible for tariff concessions, provided these goods do not fall under the restricted category outlined in section 269SJ. The core criteria for granting a TCO, as stipulated in sections 269C and 269D, involve ensuring that no substitutable goods are produced in Australia on the day the application is made. The geographic and jurisdictional reach of this legislation is national, impacting all states and territories within Australia. Notably, the Act ensures that the rights of any person, other than the Commonwealth, are not adversely affected by the issuance of a TCO, thereby safeguarding against any retroactive disadvantages or liabilities. The application of this Act can be further detailed through subordinate instruments, which may provide additional specifications or conditions for the concession orders.
Key Provisions
The main operative sections of this legislation are sections 269C, 269B, 269D, 269E, 269P, and 269SJ of the Customs Act 1901, which provide the framework for making Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. The CEO must then determine whether the application meets the core criteria, which are outlined in section 269C. This section stipulates that an application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Substitutable goods, as defined in section 269B, are goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use to which the goods subject of the TCO application can be put. If the CEO is satisfied that the application meets the core criteria, they must make a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes certain obligations and requirements on the parties involved. For instance, a person seeking a TCO must apply to the CEO, as stipulated in section 269F. The CEO, in turn, has the responsibility to determine whether the application meets the core criteria, including whether substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, as per section 269C. Furthermore, the CEO must publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to lodge a submission, as per subsection 269K(1). In the case of TCO No. 1040997, the CEO did not receive any submissions in response to this invitation.
The Customs Act 1901 also outlines potential consequences for non-compliance or breach of its provisions. However, the explanatory statement provided does not mention any specific offences, penalties, or civil or criminal consequences for breaching the Act in the context of TCOs. It is important to note that the explanatory statement is limited in scope and does not provide a comprehensive overview of the potential consequences for breach of the Customs Act 1901 or any related legislation. In general, breaches of customs legislation can result in penalties such as fines, imprisonment, or both, depending on the severity of the breach and the specific provisions of the Act that have been contravened.