EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1113035
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.
EOS Fire Control Systems applied for a TCO in respect of certain thermal camera parts on 19 April 2011.
Instrument
TCO No 1113035 was made on 11 July 2011. It declares that those certain thermal camera 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. 1113035 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, enacted by the Australian Parliament, establishes a framework for the application of customs duty on imported goods. It includes provisions for Tariff Concession Orders (TCOs), which can be applied for by individuals or businesses to reduce the rate of customs duty on specific goods if certain criteria are met. Specifically, a TCO may be granted if no substitutable goods are produced in Australia at the time of the application. This mechanism is designed to encourage the importation of goods that are not locally produced, thereby potentially lowering costs for businesses and consumers and fostering economic growth. The Tariff Concession Instrument No. 1113035, introduced in 2011, exemplifies the application of this framework, providing duty-free status to certain thermal camera parts, which was beneficial to the importer as it reduced their duty costs. The process ensures transparency and allows for public consultation, as evidenced by the absence of objections to this particular TCO application.
Scope and Application
The Tariff Concession Instrument No. 1113035 applies to thermal camera parts as specified, following an application by EOS Fire Control Systems under the Customs Act 1901. This Act governs the customs duty applied to goods entering Australia and includes provisions for tariff concession orders (TCOs). The CEO of Customs makes these orders when an application meets specific criteria, primarily that no substitutable goods are produced in Australia at the time of application. The instrument specifically exempts these thermal camera parts from the usual 5% customs duty rate, applying instead a free rate as prescribed in Schedule 4 to the Customs Tariff Act 1995. This concession benefits importers of these goods by potentially allowing them to claim a refund for duties paid on imports made after the application date, which is retroactively applied from 19 April 2011. The TCO does not affect any existing rights or liabilities of non-Commonwealth entities as of the registration date. The scope of the TCO is confined to the goods explicitly named in the instrument, and it operates under the Commonwealth’s jurisdiction, with no submissions received against its publication in the Gazette.
Key Provisions
The main operative sections of the Customs Act 1901, specifically under Part XVA, pertain to the scheme for Tariff Concession Orders (TCOs) and their application process. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning certain goods. The CEO then assesses whether the application meets the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged. If the application satisfies these criteria, the CEO must issue a written TCO order as per section 269P(3), declaring that the specified goods are subject to a particular item in the Customs Tariff Act 1995. In the case of Tariff Concession Instrument No. 1113035, certain thermal camera parts were declared to be subject to item 50 of Schedule 4 to the Tariff, resulting in a duty-free status for these goods.
The Customs Act 1901 imposes specific obligations on the CEO and applicants for TCOs. The CEO is required to evaluate whether the application meets the core criteria and, if satisfied, must publish a notice in the Gazette inviting submissions from any interested parties. The CEO must also ensure that the TCO does not disadvantage any person or impose liabilities on them for actions taken prior to the TCO’s effective date. Additionally, the Act mandates that the TCO must come into force on the date the application was lodged, which is the case for Tariff Concession Instrument No. 1113035, effective from 19 April 2011.
Failure to comply with the provisions of the Customs Act 1901 regarding TCOs can lead to various consequences. While the explanatory statement does not explicitly detail offences or penalties for non-compliance, breaches of customs regulations generally can result in both civil and criminal penalties. Civil penalties can include financial penalties, fines, and the recovery of unpaid duty and taxes. Criminal penalties can encompass imprisonment, fines, or both, depending on the severity of the breach and the discretion of the court. The specific penalties for breaches related to TCOs would be determined in the context of the broader customs legislation and any relevant case law.