EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1111085
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.
Britax Automotive Equipment applied for a TCO in respect of certain switches on 31 March 2011.
Instrument
TCO No 1111085 was made on 20 June 2011. It declares that those certain switches 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. 1111085 is taken to have come into force on 31 March 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 Tariff Concession Instrument No. 1111085 was enacted in 2011 under the Customs Act 1901 to address the need for tariff concessions on specific imported goods. This legislation was introduced to provide relief by reducing the customs duty on certain goods, in this case, certain switches, where the Chief Executive Officer (CEO) of Customs determined that no substitutable goods were produced in Australia. The CEO, after reviewing the application from Britax Automotive Equipment and finding that the core criteria were met, issued Tariff Concession Order (TCO) No. 1111085, which came into effect on the date of the application, 31 March 2011. The policy objective is to support Australian importers by reducing the cost of imported goods, thereby enhancing their competitiveness and the flow of goods within the economy. This instrument does not impose any liabilities on any person and provides a refund of duty on goods imported since the commencement date to the affected importers.
Scope and Application
The Tariff Concession Instrument No. 1111085 under the Customs Act 1901 applies specifically to goods for which a Tariff Concession Order (TCO) has been requested and subsequently granted by the Chief Executive Officer of Customs. This legislative instrument allows for the reduction or elimination of customs duty on specified goods, in this case certain switches, provided that no substitutable goods are produced in Australia in the ordinary course of business. The application of this instrument is limited to entities or individuals who have applied for and been granted a TCO, and it affects the importation of the specified goods by providing them with a reduced or free customs duty rate. The geographic reach of this Act is national, applying across all states and territories of Australia. The Act does not impose any liabilities on individuals or entities other than the Commonwealth, and it does not disadvantage anyone in terms of their rights as of the date of registration. Furthermore, the application of the Act can be extended or restricted through subordinate instruments, allowing for the dynamic management of tariff concessions as necessary.
Key Provisions
The key operative sections of this legislation include section 269F which allows a person to apply to the CEO for a Tariff Concession Order (TCO) in respect of goods, provided the goods are not specified in section 269SJ of the Customs Act 1901. Section 269C outlines the core criteria that an application must meet, specifically that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P(3) mandates that if the CEO is satisfied the application meets the core criteria, they must make a written order declaring that the goods are to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. This particular TCO, numbered 1111085, was made on 20 June 2011, and it applies to certain switches, reducing the duty rate from 5% to free.
The Act imposes several obligations on the parties involved. Firstly, any person wishing to apply for a TCO must ensure their application is valid and meets the criteria outlined in section 269C. The CEO has the duty to assess these applications and make a decision based on the information provided. If the CEO is satisfied that the application meets the core criteria, they are required to make a written TCO as per section 269P(3). Additionally, upon accepting a TCO application as valid, the CEO must publish a notice in the Gazette inviting any submissions from interested parties, as stipulated in subsection 269K(1). Failure to meet these obligations could result in the TCO not being granted.
The Customs Act 1901 outlines specific offences and penalties for breaches related to the TCO process. While the explanatory statement does not detail specific penalties for breach of the TCO provisions, general penalties for breaches of the Customs Act can be severe. Under section 236 of the Act, an individual found guilty of an offence against the Act may be liable to a fine of up to 10,000 penalty units or imprisonment for up to five years, or both. Additionally, corporations may face fines of up to 50,000 penalty units. These penalties underscore the importance of compliance with the Act’s provisions and the potential consequences for non-compliance.
In summary, the legislation sets out a clear process for applying for and granting TCOs, ensuring that the criteria are met before any order is made. It also outlines the obligations of the CEO and the applicant, ensuring a transparent and fair process. While specific penalties for breaches are not detailed in the explanatory statement, the potential penalties under the Customs Act serve as a deterrent against non-compliance. This structured approach helps maintain the integrity of the customs duty system and ensures that the rights and interests of all parties are protected.