EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1105006
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.
Best & Less Pty Ltd applied for a TCO in respect of certain parcel sorter parts on 04 February 2011.
Instrument
TCO No 1105006 was made on 02 May 2011. It declares that those certain parcel sorter 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. 1105006 is taken to have come into force on 04 February 2011.
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 the legal framework for the administration of customs and excise duties in Australia. The introduction of Part XVA in the Customs Act 1901 was to establish a scheme under which Tariff Concession Orders (TCOs) could be made by the Chief Executive Officer of Customs. This legislation was introduced to address the need for a streamlined process to reduce customs duty on specific goods that are not produced in Australia and for which there are no substitutable alternatives. The policy objective is to support Australian industries by facilitating the importation of goods that are not domestically produced, thus potentially lowering costs and encouraging competition. The process outlined in the Act ensures that applications for tariff concessions are considered fairly and transparently, with an opportunity for public consultation before any concession is granted.
Scope and Application
The Tariff Concession Instrument No. 1105006, made under the Customs Act 1901, applies to specific parcel sorter parts, allowing for tariff concessions where no substitutable goods are produced in Australia in the ordinary course of business. This instrument is relevant to entities and individuals involved in the importation of these particular goods, providing them with a lower rate of customs duty, specifically zero percent, as opposed to the general rate of five percent. The geographic reach of this instrument is national, as it pertains to the federal customs regime overseen by the Chief Executive Officer of Customs, and its application is not limited to specific states or territories. The instrument is designed to exclude any goods that cannot be subject to a Tariff Concession Order (TCO) as outlined in section 269SJ of the Customs Act 1901. The instrument's application can be further extended or refined through subordinate instruments, which may detail additional criteria or specify other goods eligible for such concessions.
Key Provisions
The Customs Act 1901, as amended by Tariff Concession Instrument No. 1105006, introduces specific provisions concerning the application and approval of Tariff Concession Orders (TCOs). According to section 269F, a person may apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. The CEO must then assess whether the application meets the core criteria, which are detailed in section 269C. This includes ensuring that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the application meets these criteria, the CEO is required to issue a written order, a TCO, declaring that the specified goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, thereby reducing the rate of customs duty.
The obligations imposed on the parties by this Act are significant and include the requirement for applicants to provide detailed and accurate information to support their TCO applications. Section 269P(3) mandates that the CEO must thoroughly evaluate whether the goods in question meet the criteria for a TCO, ensuring that the application does not involve goods that can be substituted by Australian-produced goods. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit objections or reasons why the TCO should not be granted. This transparency requirement ensures that all stakeholders have the opportunity to be heard before a TCO is issued.
The Act also outlines specific consequences for non-compliance with the requirements set forth. While the explanatory statement does not detail specific offences or penalties within the text of the Act, it is understood that breaches of customs regulations generally carry severe penalties. These can include fines and imprisonment for criminal offences, as well as civil penalties that may be enforced through the courts. The exact penalties would depend on the nature and severity of the breach, but they underscore the importance of adhering to the legislative requirements to avoid legal repercussions. The Act ensures that any person, other than the Commonwealth, whose rights are affected adversely by the TCO will not be disadvantaged, and the rights of importers are specifically protected to allow for duty refunds on goods imported since the TCO came into effect.