EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1134600
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.
ABB Australia Pty Ltd applied for a TCO in respect of certain dc switch disconnectors on 14 October 2011.
Instrument
TCO No 1134600 was made on 09 January 2012. It declares that those certain dc switch disconnectors 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. 1134600 is taken to have come into force on 14 October 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. 1134600, made under the Customs Act 1901, was enacted to provide a tariff concession for certain dc switch disconnectors by the Chief Executive Officer of Customs. The instrument addresses the problem of ensuring that Australian importers of specific goods are not unfairly burdened by customs duties, particularly when these goods are not produced domestically and there is no suitable domestic substitute. The instrument was introduced to facilitate smoother trade practices by offering a lower or free rate of customs duty on these goods, thereby encouraging importation and potentially stimulating competition and reducing costs for end-users. This initiative aligns with the policy objective of the Customs Act 1901 to streamline customs processes and support economic activities by providing tariff relief where appropriate. The instrument came into effect on 14 October 2011, the date the application for the tariff concession was lodged, and does not affect any pre-existing rights or impose new liabilities on persons other than the Commonwealth.
Scope and Application
The Customs Act 1901, under its Part XVA, governs the creation and application of Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs may reduce the customs duty on certain goods. The Act applies to individuals or entities seeking to import goods into Australia, provided the goods are not specified in section 269SJ of the Act as ineligible for tariff concessions. For a TCO to be issued, the CEO must be satisfied that no substitutable goods are being produced in Australia in the ordinary course of business. The Act's application is national, extending across all jurisdictions within Australia. The Explanatory Statement for Tariff Concession Instrument No. 1134600, which provides free duty on certain dc switch disconnectors, details that no submissions were received opposing the TCO, and it came into force on the date the application was lodged, 14 October 2011. This TCO does not disadvantage any person by affecting their rights or imposing liabilities for actions taken prior to its registration, and it allows importers to apply for a refund of duties paid on these goods since the effective date.
Key Provisions
The Customs Act 1901, under Part XVA, outlines a scheme where Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). This scheme allows for a lower rate of customs duty on goods specified in a TCO (section 269F). For an applicant to be eligible for a TCO, the goods in question must not be specified in section 269SJ, which lists goods that cannot be subject to a TCO. If the application is valid and the CEO is satisfied that the core criteria are met, the CEO must issue a TCO (section 269C). The core criteria include the absence of substitutable goods being produced in Australia on the day the application is lodged (section 269P(3)). The terms 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are defined in sections 269D, 269E, and 269F respectively.
The obligations imposed by the Act on parties include the requirement for the CEO to publish a notice in the Gazette, inviting submissions from any interested party who believes the TCO should not be issued (subsection 269K(1)). In the case of TCO No. 1134600, no submissions were received. The TCO itself becomes effective on the day the application is lodged (subsection 269S(1)). For TCO No. 1134600, this date is 14 October 2011. Importantly, the TCO does not retroactively affect any rights or impose liabilities on anyone except the Commonwealth, ensuring that the rights of importers will be positively affected.
Breach of the provisions outlined in the Customs Act 1901 can result in civil or criminal consequences. Although specific penalties are not detailed in the provided text, the general legal framework suggests that penalties for non-compliance can include fines and imprisonment. For example, under the Crimes Act 1914, penalties for customs offences can include fines up to $22,200 for individuals and $111,000 for bodies corporate, along with potential imprisonment. The specific penalties would depend on the nature and severity of the breach.