EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1130274
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.
GUD Automotive Pty Ltd applied for a TCO in respect of certain filters on 31 August 2011.
Instrument
TCO No 1130274 was made on 21 November 2011. It declares that those certain filters 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. 1130274 is taken to have come into force on 31 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 Commonwealth Parliament, establishes a framework for the regulation of customs duties and other charges in Australia. Specifically, Part XVA of the Act outlines the mechanism through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. The problem this legislation addresses is the potential for unfair competitive disadvantage faced by Australian businesses when importing goods that can be produced domestically. The policy objective is to provide a pathway for businesses to apply for reduced customs duties on imported goods under certain conditions, thereby fostering a more competitive market environment. This mechanism aims to protect domestic industries from unfair competition while also allowing businesses to access necessary goods at reduced costs when domestic production is not feasible.
The Tariff Concession Instrument No. 1130274, made under the Customs Act 1901, grants a tariff concession to GUD Automotive Pty Ltd for certain filters, effective from 31 August 2011. This concession was granted after the CEO of Customs determined that no substitutable goods were produced in Australia at the time the application was lodged. Consequently, the concession allows for the importation of these filters duty-free, which contrasts with the general rate of duty of 5%. This legislative instrument ensures that the rights of importers are positively affected, enabling them to seek refunds for duties paid on imports from the date the concession took effect. Importantly, the concession does not impose any liabilities on any person and does not disadvantage anyone other than the Commonwealth.
Scope and Application
The Customs Act 1901, under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders provide lower rates of customs duty for certain goods, contingent upon specific criteria. The legislation applies to individuals or entities that apply for a TCO, focusing on the production and use of goods in Australia. The geographic reach of this Act is national, as it operates under the Commonwealth’s jurisdiction. Exclusions from TCOs include goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The application of the Act can be extended or restricted through subordinate instruments, which may detail additional conditions or clarifications. The Explanatory Statement outlines the process for making a TCO, including the requirement that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. The TCO in question, No. 1130274, applies to certain filters and became effective on the date the application was lodged, 31 August 2011.
Key Provisions
The key operative sections of this legislation, specifically Tariff Concession Instrument No. 1130274, include sections 269F, 269C, 269B, and 269P(3) of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of goods, while Section 269C stipulates that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Section 269B defines key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods', while Section 269P(3) mandates that the CEO must make a written order (TCO) if satisfied that the application meets the core criteria.
The Act imposes several obligations and requirements on the parties it governs. Under Section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as soon as practicable after accepting a TCO application as valid. The CEO is also required to determine whether a TCO application meets the core criteria, which involves assessing whether any substitutable goods were produced in Australia on the day the application was lodged, as per Sections 269C and 269B. Furthermore, the TCO does not affect the rights of any person as at the date of registration to disadvantage them or impose liabilities for anything done or omitted before the registration date, as per Subsection 269S(1).
The legislation does not explicitly detail specific offences, penalties, or civil/criminal consequences for breach within the provided text. However, it is implied that failure to comply with the obligations imposed by the Act, such as not publishing a notice in the Gazette or not assessing the core criteria of a TCO application correctly, could lead to legal repercussions. The maximum penalties for breaches of the Customs Act 1901, while not detailed in the provided text, could potentially include fines and imprisonment, depending on the nature and severity of the breach.