EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1129160
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.
Australian Aerospace applied for a TCO in respect of certain instrument cases on 25 August 2011.
Instrument
TCO No 1129160 was made on 21 November 2011. It declares that those certain instrument cases 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. 1129160 is taken to have come into force on 25 August 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 a framework for the administration of customs and excise duties in Australia. This Act allows for the creation of Tariff Concession Orders (TCOs) to provide relief from customs duty on specific goods. The Customs Act 1901 was amended to include provisions for TCOs to address the gap in providing temporary tariff relief for imported goods, ensuring they are not duplicated by locally produced substitutes. Tariff Concession Instrument No. 1129160, introduced to facilitate this, aims to provide a concession on the customs duty for certain instrument cases, effectively reducing the duty from 5% to free, thereby promoting trade and economic efficiency. The policy objective behind this TCO is to support Australian industries by ensuring that tariff relief is available only when genuinely needed, preventing any disadvantage to local producers.
Scope and Application
The Customs Act 1901, specifically Part XVA, outlines the legislative framework under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO) to provide a lower rate of customs duty on certain goods. This process is applicable to any individual or entity that applies to the CEO for a TCO in respect of goods not specified in section 269SJ of the Act, which excludes certain goods from being subject to a TCO. The scope of the Act extends to the entire Commonwealth of Australia, with no geographical limitations. The Act mandates that a TCO application meets core criteria if, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business. The CEO must make a written order if satisfied that the application meets these criteria. Notably, the Act does not impose liabilities on any person, and it does not affect the rights of any person as at the date of registration of the TCO. Any subordinate instruments that extend or restrict the application of the Act are not specified in the explanatory statement.
Key Provisions
The key operative sections of this legislation include section 269F, which allows an application to be made to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO), and section 269C, which provides the core criteria that must be met for the CEO to consider making such an order. If the CEO is satisfied that the application meets these criteria, they are required under section 269P(3) to make a written order declaring the goods to which the concession applies.
The Act imposes several obligations on the parties involved. Firstly, the CEO must determine whether the application for a TCO meets the core criteria, which involves ensuring that no substitutable goods were produced in Australia at the time the application was lodged. Secondly, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who might have reasons why the TCO should not be made, as outlined in subsection 269K(1). In this particular instance, the CEO did not receive any submissions, thereby facilitating the creation of the TCO.
Under the Customs Act 1901, breaches of the provisions governing the application and implementation of TCOs may have both civil and criminal consequences. The specifics of these penalties are not detailed in the provided explanatory statement, but typically, violations of customs laws can result in fines or imprisonment, depending on the severity of the breach. The TCO itself, however, does not impose any new liabilities on individuals or entities beyond those already stipulated by existing customs regulations.
The explanatory statement also highlights that the TCO does not affect the rights of any person as at the date of registration, ensuring that no one (other than the Commonwealth) is disadvantaged or imposed upon liabilities for actions taken before the TCO's effective date. This means that the rights of importers are beneficially affected, as they can apply for a refund of duty on goods imported since the TCO's effective date, as stipulated under paragraph 126(1)(r) of the Regulations.