EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1113008
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 19 April 2011.
Instrument
TCO No 1113008 was made on 11 July 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. 1113008 is taken to have come into force on 19 April 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 was enacted to establish a comprehensive regulatory framework for customs and excise duties in Australia, with Part XVA specifically addressing Tariff Concession Orders (TCOs). This piece of legislation was introduced to provide relief on customs duty for certain goods, ensuring that Australian consumers and businesses are not subjected to unnecessary tariffs when no equivalent goods are produced domestically. Enacted by the Australian Parliament, the policy objective is to promote economic efficiency and competitiveness by facilitating the import of goods that cannot be locally produced, thereby reducing costs and increasing consumer choice. The explanatory statement details how Britax Automotive Equipment's application for tariff concessions on specific switches was approved on 11 July 2011, with no objections raised during the consultation period. This concession effectively lowered the duty rate from 5% to free, benefitting importers who can now apply for refunds on duties paid on these goods since the application date of 19 April 2011.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the creation of Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs can apply a lower rate of customs duty on certain goods. This legislation applies to entities or individuals seeking to import goods that are eligible for a tariff concession, provided they meet the criteria stipulated in the Act. The TCOs are applicable to goods that are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The application process involves an assessment by the CEO to determine if the goods in question are not substitutable by products manufactured in Australia, as per section 269C and section 269D. Once an application meets these core criteria, a TCO is issued, granting a free duty rate on the specified goods. This instrument has a national reach, applying across all jurisdictions within Australia. The TCO does not retroactively affect the rights of any person, nor does it impose liabilities for actions taken prior to the issuance of the TCO. Subordinate instruments and regulations may further define and extend the application of this Act, providing additional clarity and specific procedural guidelines.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1113008, which is an instrument under the Customs Act 1901, establish the conditions and procedures for the granting of a Tariff Concession Order (TCO). Specifically, section 269F (1) of the Act allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO for goods that are eligible under the scheme. Section 269C and 269P (3) provide the core criteria that must be satisfied by the CEO for a TCO to be granted, which includes verifying that no substitutable goods are produced in Australia in the ordinary course of business on the date the application was lodged. Once the CEO is satisfied with the application, they must issue a written order declaring the goods subject to the TCO, as outlined in section 269P (3). This instrument was applied to certain switches by Britax Automotive Equipment, with the CEO concluding that no substitutable goods were produced in Australia, thus meeting the core criteria.
The obligations imposed by the Act on parties or entities include the requirement for the CEO to assess whether a TCO application meets the core criteria outlined in section 269C and 269P (3). Additionally, subsection 269K (1) mandates the CEO to publish a notice in the Gazette inviting submissions from interested parties if they believe the TCO should not be granted. The CEO must consider these submissions before making a final decision. The CEO must also ensure that the TCO does not disadvantage any person or impose liabilities on them in respect of actions taken before the TCO's registration, as per subsection 269S (1). The CEO's decision to grant the TCO to Britax Automotive Equipment for certain switches was made after considering these obligations and without any adverse submissions.
The Customs Act 1901 imposes potential civil and criminal consequences for breaches related to Tariff Concession Orders. While the explanatory statement does not specify detailed penalties, general provisions within the Act may apply. Violations of the Act, including fraudulent applications or misrepresentations in the application process, could result in civil penalties, including fines and repayment of any unjustifiably claimed tariff concessions. Criminal penalties may include imprisonment, depending on the severity and intent behind the breach. These penalties are intended to ensure compliance with the terms and conditions set forth by the Act and to maintain the integrity of the tariff concession scheme.