EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1051161
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.
GSA Industries (Aust.) Pty. Ltd. applied for a TCO in respect of certain tap discs on 18 November 2010.
Instrument
TCO No 1051161 was made on 07 February 2011. It declares that those certain tap discs 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. 1051161 is taken to have come into force on 18 November 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 imposition and collection of customs duties. Part XVA of the Act, in particular, outlines a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (CEO) to apply lower rates of customs duty on specified goods. This mechanism was introduced to address the need for tariff relief on certain goods, ensuring that Australian businesses can compete more effectively in the global market without the burden of high customs duties. The explanatory statement for Tariff Concession Instrument No. 1051161, made under the Customs Act 1901, exemplifies this process by detailing the application and approval of a TCO for certain tap discs, reducing the duty on these goods from 5% to free. The policy objective here is to support Australian businesses by making imported goods more competitively priced, thereby encouraging economic growth and consumer access to a broader range of products.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCOs), applies to any person or entity seeking to import goods into Australia under specific conditions that allow for a lower rate of customs duty. The Act extends its reach across the Commonwealth of Australia, governing the importation of goods that are subject to a TCO made by the Chief Executive Officer of Customs. The process involves an application by an interested party, which must meet the core criteria outlined in the Act, specifically ensuring that no substitutable goods are produced in Australia at the time of application. Exclusions apply to goods specified in section 269SJ, which are ineligible for tariff concessions. The Act also mandates the publication of TCO applications in the Gazette to allow for public submissions, although in this case, no submissions were received. The TCOs do not affect pre-existing rights or impose liabilities on persons other than the Commonwealth, ensuring that the rights of importers are beneficially affected by allowing for duty refunds on eligible goods imported since the effective date of the concession.
Key Provisions
The key sections of the Tariff Concession Instrument No. 1051161 include sections 269C, 269F, 269P, and 269S (subsection 269S(1)) of the Customs Act 1901, which collectively establish the framework for the application, assessment, and implementation of Tariff Concession Orders (TCOs). Under section 269F, a person may apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. The CEO must determine whether the application meets the core criteria, as outlined in section 269C, which involves ensuring that no substitutable goods were produced in Australia on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, they must issue a written TCO under section 269P(3), declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The Customs Act imposes several obligations on the parties involved in the TCO process. The CEO is required to assess each application to determine if it meets the core criteria specified in section 269C. 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 proceed. This notice must be published as soon as practicable after accepting the application as valid. Importers, on the other hand, must ensure that their applications provide all necessary information and meet the statutory requirements to be considered valid.
Failure to comply with the provisions of the Customs Act can result in various civil or criminal consequences. While the explanatory statement does not explicitly list specific offences or penalties for breaches of the TCO provisions, general penalties for breaches of the Customs Act may apply. These penalties can include fines and imprisonment, depending on the nature and severity of the breach. For instance, section 256 of the Customs Act provides for penalties including fines of up to $10,500 for individuals and $52,500 for bodies corporate, along with potential imprisonment terms for serious breaches. These provisions underscore the importance of adhering to the legislative requirements when applying for and implementing TCOs.