EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1053814
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.
Exide Pty Ltd applied for a TCO in respect of certain nickel cadmium accumulators on 8 December 2010.
Instrument
TCO No 1053814 was made on 7 March 2011. It declares that those certain nickel cadmium accumulators 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. 1053814 is taken to have come into force on 8 December 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 was enacted to provide a framework for the regulation of customs and excise duties in Australia. The Act was introduced to address the need for a structured system to manage imports and exports, including the imposition of tariffs and the regulation of goods entering and leaving the country. Part XVA of the Customs Act 1901 provides for the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which allow for lower rates of customs duty on specified goods. This legislative instrument aims to facilitate the import of goods that are not produced in Australia, thereby supporting industries that rely on imported materials and promoting competition. The policy objective is to ensure that Australian businesses can access necessary goods at a reduced cost, which in turn supports economic efficiency and consumer benefit. The explanatory statement for Tariff Concession Instrument No. 1053814 outlines that the instrument was made to grant tariff concessions on certain nickel cadmium accumulators, resulting in a reduction of the duty rate from 5% to free. The process involved an application by Exide Pty Ltd, which was subsequently approved by the CEO of Customs after considering the criteria set out in the Act.
Scope and Application
The Tariff Concession Instrument No. 1053814 under the Customs Act 1901 applies to the concession of customs duty on certain nickel cadmium accumulators, specifically those identified by Exide Pty Ltd in their application dated 8 December 2010. The Act pertains to any entity or individual seeking tariff concessions for specified goods, ensuring that the application complies with the criteria set out in the Act, particularly those goods for which no substitutable products are produced in Australia. The geographic reach of this Act is national, as it falls under the Commonwealth's purview, and it applies to all entities involved in the importation of the specified goods across Australia. Notably, the Act excludes certain goods that are outlined in section 269SJ, which cannot be subject to a tariff concession order. The instrument extends its application through subordinate regulations, such as the Customs Regulations 1999, which provide further details on the administrative processes and rights of applicants and affected parties.
Key Provisions
The primary sections of this legislation (F2011L01026) pertain to the making of Tariff Concession Orders (TCO) under the Customs Act 1901 (the Act). Section 269F allows individuals or entities to apply for a TCO in respect of goods, provided that these goods are not specified in section 269SJ, which outlines goods ineligible for a TCO. If the Chief Executive Officer of Customs (CEO) is satisfied that the application complies with the core criteria, as stipulated in section 269C, they must make a written TCO. The TCO, such as TCO No. 1053814, specifies the goods and the applicable tariff concession, reducing the duty rate from the general rate to zero.
The Act imposes several obligations on the parties involved. An applicant must ensure their application is not in respect of goods specified in section 269SJ and must provide sufficient information for the CEO to determine if the application meets the core criteria. Section 269P(3) requires the CEO to make a TCO if the core criteria are satisfied, while section 269K(1) mandates that the CEO publish a notice in the Gazette inviting submissions from any interested parties. In this case, the CEO did not receive any submissions opposing the TCO.
There are significant consequences for non-compliance with the provisions of the Act. While the Act does not specify civil or criminal penalties for failing to comply with the TCO provisions, failure to adhere to the Act’s requirements could result in the TCO being invalidated, leading to potential financial liabilities for the applicant. The TCO itself provides that it does not impose any liabilities on any person, but general legal consequences may apply for breaches of the Customs Act, including fines and imprisonment for serious violations.