EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1046375
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.
Waratah Thoroughbreds Pty Ltd applied for a TCO in respect of certain horse walker exerciser and trainer on 15 October 2010.
Instrument
TCO No 1046375 was made on 10 January 2011. It declares that those certain horse walker exerciser and trainer 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. 1046375 is taken to have come into force on 15 October 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, outlines the regulatory framework for customs duties and border control. The Act provides a mechanism for granting tariff concessions through Tariff Concession Orders (TCOs), which can lower customs duties on specified goods. The objective of this scheme is to encourage the production of certain goods within Australia by providing duty-free access to non-Australian produced goods that have no domestic substitutes. The process involves applications to the Chief Executive Officer of Customs, who must determine if the application meets the core criteria, which includes ensuring that no substitutable goods are produced in Australia. Upon meeting these criteria, a TCO can be issued, as seen in the case of Waratah Thoroughbreds Pty Ltd's application for certain horse walker exercisers and trainers, which resulted in Instrument TCO No 1046375. This instrument, which came into force on the date of application, 15 October 2010, declares that these goods are subject to a zero rate of duty, significantly benefiting the rights of importers who may apply for duty refunds.
Scope and Application
The Tariff Concession Order No. 1046375 under the Customs Act 1901 applies to the specific goods, namely certain horse walker exercisers and trainers, as identified in the application by Waratah Thoroughbreds Pty Ltd. This instrument is made under the authority provided by Part XVA of the Customs Act 1901, which allows the Chief Executive Officer of Customs to issue Tariff Concession Orders to provide lower rates of customs duty on certain imported goods. The application process requires the CEO to determine whether the goods in question meet the core criteria outlined in the Act, specifically that no substitutable goods are produced in Australia. Upon satisfying these criteria, the CEO issues a TCO, thereby granting tariff concessions on the specified goods, which in this case, results in a duty-free rate for the horse walker exercisers and trainers. The TCO applies nationally and its issuance is effective from the date of the application, in this case, 15 October 2010. The order does not retroactively affect the rights or impose liabilities on any person, including the Commonwealth, except to benefit importers who may apply for duty refunds on goods imported since the effective date of the TCO. The CEO published a notice in the Gazette inviting submissions from interested parties, though none were received in this instance.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 1046375, as part of the Customs Act 1901, focus on the procedures for making and approving Tariff Concession Orders (TCOs) and their effects on customs duties. Section 269F (1) allows an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of specific goods, provided that these goods do not fall under the category of those explicitly excluded by section 269SJ. If the CEO determines that the application meets the core criteria outlined in section 269C, which essentially requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, a TCO can be issued. Section 269P(3) then mandates that the CEO must make a written order (TCO) specifying that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, with the duty rate specified in the order.
The obligations imposed by the Act on parties involve the process of applying for and receiving a TCO. For an applicant like Waratah Thoroughbreds Pty Ltd, the primary obligation is to submit a valid application under section 269F, ensuring that the goods in question meet the criteria outlined in sections 269C and 269SJ. Once an application is accepted, the CEO is required to publish a notice in the Gazette under subsection 269K(1) inviting submissions from any interested parties. If no objections are received, the CEO must proceed to make the TCO as stipulated. For importers, the obligation includes the ability to apply for a refund of duty on goods imported since the date the TCO was deemed to come into force under paragraph 126(1)(r) of the Regulations.
Under the Customs Act 1901, breaches of the provisions regarding TCOs can lead to various consequences. While specific offences and penalties related to the issuance and compliance with TCOs are not detailed in this explanatory statement, it is clear that failure to adhere to the requirements set out in sections 269C and 269F could result in non-compliance with the Act. The Act does not specify particular penalties for such breaches but generally, non-compliance with customs regulations can lead to civil or criminal consequences, including fines or imprisonment, depending on the severity and intent behind the breach. The exact penalties would depend on the broader context of the Customs Act and related regulations.