EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1043968
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.
Madd Gear Pty Ltd applied for a TCO in respect of certain scooter parts on 27 September 2010.
Instrument
TCO No 1043968 was made on 20 December 2010. It declares that those certain scooter parts 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. 1043968 is taken to have come into force on 27 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, provides a framework for the regulation of customs duties and other charges. It includes provisions for Tariff Concession Orders (TCOs), which allow for the reduction or exemption of customs duty on certain goods. Enacted to address the need for flexibility in tariff regulation, the Act aims to support Australian industries and consumers by providing tariff relief on specific goods. The Tariff Concession Instrument No. 1043968, issued under this Act, responds to an application from Madd Gear Pty Ltd for tariff concessions on certain scooter parts. This instrument was introduced to ensure that no substitutable goods were being produced in Australia at the time of the application, thereby justifying the tariff concession. The policy objective is to provide relief where appropriate, without disadvantaging existing rights or imposing new liabilities on individuals or entities.
Scope and Application
The Tariff Concession Instrument No. 1043968 under the Customs Act 1901 applies to Madd Gear Pty Ltd’s application for tariff concession orders (TCO) concerning certain scooter parts, which were approved on 20 December 2010. This legislation is applicable to the entities involved in the importation of these goods, with the primary beneficiaries being importers who can now benefit from the reduced customs duty rate of free, as opposed to the general rate of 5%. The scope of the Act extends to ensuring that no substitutable goods were produced in Australia on the day the application was lodged, thus qualifying for the concession. The geographical reach of this Act is national, as it pertains to the importation of goods into Australia, governed under the Commonwealth jurisdiction. Any exclusions or exemptions are determined by the criteria specified in section 269SJ of the Act, which outlines goods that cannot be subject to a TCO. The Act may also extend its application through subordinate instruments, although specific details are not elaborated in the provided text.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) concerning Tariff Concession Orders (TCOs) are sections 269F, 269C, 269B, 269D, 269E, 269P, and 269SJ (subsections 269K(1) and 269S(1) also apply). Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods, provided the goods are not specified in section 269SJ, which lists those goods that cannot be subject to a TCO. Section 269C specifies the core criteria that the TCO application must meet: no substitutable goods must be produced in Australia in the ordinary course of business on the day the application is lodged. Sections 269B, 269D, and 269E provide definitions for 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' respectively. If the CEO is satisfied that the application meets the core criteria, section 269P(3) requires the CEO to make a written TCO, specifying the applicable item of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations and requirements on the parties involved in the TCO process. Firstly, applicants must ensure their application complies with the core criteria outlined in section 269C, which involves demonstrating that no substitutable goods were produced in Australia on the day of application. Secondly, the CEO is required to publish a notice in the Gazette under subsection 269K(1) inviting submissions from any person who believes the TCO should not be made, and to consider any submissions received. The CEO must also decide whether the application meets the core criteria and, if so, make a written TCO as per section 269P(3). Finally, the TCO must specify the applicable item of Schedule 4 to the Customs Tariff Act 1995, which sets the rate of duty for the goods subject to the TCO.
Under the Customs Act 1901, any breaches of the provisions concerning TCOs can result in civil or criminal consequences. While the explanatory statement does not specify detailed penalties, breaches of customs regulations generally can lead to substantial fines and imprisonment. For instance, under section 268 of the Act, penalties for making a false or misleading statement in connection with a customs matter can include fines of up to $22,200 for individuals and up to $111,000 for corporations, along with potential imprisonment. The seriousness of the consequences underscores the importance of compliance with the Act's requirements.