EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1113309
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.
Chemring Australia Pty Ltd applied for a TCO in respect of certain remote radio controlled firing system on 21 April 2011.
Instrument
TCO No 1113309 was made on 18 July 2011. It declares that those certain remote radio controlled firing system 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. 1113309 is taken to have come into force on 21 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 Tariff Concession Instrument No. 1113309 was enacted under the Customs Act 1901 with the purpose of providing a concession in the rate of customs duty for certain goods. Specifically, this instrument addresses the issue of applying lower duty rates for goods that are not substitutable by Australian-made alternatives. The instrument was introduced by the Chief Executive Officer of Customs, who assessed the application from Chemring Australia Pty Ltd for a Tariff Concession Order (TCO) in respect of certain remote radio controlled firing systems. Upon determining that no substitutable goods were produced in Australia, the CEO issued the TCO, which effectively made the duty on these goods free, down from the general rate of 5%. This legislative measure was designed to benefit importers by allowing them to apply for a refund of duty on these goods imported since the date the TCO was taken to have come into force, thereby avoiding any disadvantage or new liabilities for individuals or entities other than the Commonwealth.
Scope and Application
The Customs Act 1901 applies to the application for Tariff Concession Orders (TCOs) concerning goods that are not produced in Australia in the ordinary course of business. This legislation empowers the Chief Executive Officer of Customs to make decisions on such applications, effectively determining which goods are eligible for reduced customs duty rates. The TCO mechanism benefits importers by allowing them to apply for a refund of duty on goods imported since the TCO is deemed to have come into force. Importantly, the Act ensures that the TCO does not disadvantage any person, nor does it impose liabilities on individuals or entities for actions taken prior to the TCO's registration date. This legislation operates on a Commonwealth level, impacting all entities involved in the import and export of goods across Australia.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1113309 (Section 269C, Section 269B, and Section 269P(3)) establish the criteria for making a Tariff Concession Order (TCO). Specifically, Section 269C requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269B defines the terms "goods produced in Australia", "ordinary course of business", and "substitutable goods". If the Chief Executive Officer (CEO) of Customs is satisfied that these criteria are met, Section 269P(3) mandates that the CEO must issue a written TCO, specifying that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations on the parties it governs. Firstly, any person wishing to apply for a TCO must ensure their application complies with the core criteria outlined in Section 269C. The CEO of Customs must also follow specific procedural requirements, including publishing a notice in the Gazette inviting submissions from any interested parties as per Section 269K(1). Additionally, the CEO must refrain from making a TCO if the application pertains to goods specified in Section 269SJ of the Customs Act 1901, which are ineligible for tariff concessions.
Any breach of the provisions outlined in the Customs Act 1901 or the regulations pertaining to TCOs may result in civil or criminal penalties. For instance, providing false information in a TCO application could lead to prosecution under the general criminal code provisions for fraud. The penalties for such offences could include fines or imprisonment, depending on the severity of the offence. The maximum penalties are not explicitly stated in the explanatory statement but would typically be determined by the relevant legislation governing fraud and misrepresentation in Australia. Compliance with these provisions is crucial to avoid any legal repercussions.