EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1135477
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.
BFT Automation Australia Pty Ltd applied for a TCO in respect of certain motor kits on 21 October 2011.
Instrument
TCO No 1135477 was made on 12 January 2012. It declares that those certain motor kits 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. 1135477 is taken to have come into force on 21 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 Customs Act 1901, enacted by the Commonwealth Parliament, was established to regulate the importation and exportation of goods in Australia. It was designed to address the need for a systematic approach to managing customs duties and tariffs, ensuring the smooth flow of international trade while protecting domestic industries and revenue. The Act was introduced to create a comprehensive legal framework that governs customs procedures and ensures compliance with international trade obligations. The policy objective of the Customs Act 1901 is to facilitate efficient and effective customs operations, support the economic interests of Australia, and maintain the integrity of the nation's borders.
The Tariff Concession Instrument No. 1135477 was introduced under the Customs Act 1901 to provide tariff concessions for certain motor kits imported by BFT Automation Australia Pty Ltd. This instrument was enacted to address the specific needs of the company by reducing the customs duty on these goods from the general rate of 5% to free, provided that no substitutable goods were produced in Australia. The decision to grant the tariff concession was made by the Chief Executive Officer of Customs, who was satisfied that the application met the core criteria outlined in the Act. The tariff concession is effective from the date the application was lodged, 21 October 2011, and it benefits importers by allowing them to apply for a refund of duty on goods imported since that date. This instrument ensures that the rights of all parties are protected and that no new liabilities are imposed as a result of the concession.
Scope and Application
The Tariff Concession Instrument No. 1135477, issued under the Customs Act 1901, applies specifically to the goods, in this case certain motor kits, for which a Tariff Concession Order (TCO) has been sought and granted by the Chief Executive Officer of Customs (CEO). The Act applies to any person or entity seeking a tariff concession for imported goods that are not being produced in Australia in the ordinary course of business, as per the core criteria outlined in section 269C of the Act. The geographic and jurisdictional reach of this legislation is nationwide, as it pertains to the Commonwealth's customs duties and tariff concessions. It is important to note that the application of this Act is not subject to exclusions, exemptions, or specific thresholds as long as the goods in question meet the core criteria for a TCO. The Act's application can be extended or restricted through subordinate instruments, such as the Customs Tariff Act 1995, which provides the specific duty rates and classifications for the goods subject to the TCO.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1135477 under the Customs Act 1901 (sections 269C, 269F, and 269P) provide the framework for the creation and effect of Tariff Concession Orders (TCOs). Under section 269F, an application for a TCO can be submitted by a person to the Chief Executive Officer of Customs (CEO). The CEO must then determine if the application meets the core criteria specified in section 269C, which includes ensuring that no substitutable goods were produced in Australia on the day the application was lodged. If these criteria are met, the CEO is mandated by section 269P(3) to issue a written TCO, effectively lowering the customs duty on the specified goods. For the instrument in question, TCO No. 1135477, the CEO determined that certain motor kits qualified for a concession, applying a zero percent duty rate instead of the general 5% rate.
The obligations imposed on the parties by this legislation include ensuring that applications for TCOs are made in accordance with the statutory requirements. The CEO has the duty to review applications to confirm they meet the core criteria and to consult with the public as per section 269K(1) by publishing notices in the Gazette. The applicant, in this case BFT Automation Australia Pty Ltd, must provide sufficient evidence that the goods specified do not have Australian substitutes and that they meet the criteria for concession. The CEO's decision to make TCO No. 1135477 was based on the absence of any submissions opposing the concession, indicating that the application process was transparent and inclusive of public input.
The legislation does not explicitly state specific offences or penalties for breaches of the TCO process. However, general provisions under the Customs Act 1901 and associated regulations could apply to any irregularities or non-compliance in the application or implementation of TCOs. For instance, providing false information in an application could lead to administrative penalties or even criminal charges depending on the severity and intent behind the misrepresentation. While the explanatory statement does not detail specific penalties, it is reasonable to infer that breaches could result in financial penalties, legal action, or both, as per the broader Customs Act provisions.