EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1138060
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.
Yamaha Motor Australia applied for a TCO in respect of certain portable generators on 15 November 2011.
Instrument
TCO No 1138060 was made on 07 February 2012. It declares that those certain portable generators 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. 1138060 is taken to have come into force on 15 November 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, established a framework for the imposition of customs duties on imported goods. Within this legislative scheme, Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs to reduce the customs duty on specific goods, provided certain conditions are met. This legislative instrument, F2012L00778, addresses the gap in the Customs Act by providing a mechanism through which businesses can apply for tariff concessions on imported goods under certain circumstances. The policy objective is to facilitate trade and reduce costs for businesses by allowing them to import certain goods at a lower rate of duty when no substitutable goods are produced in Australia. The explanatory statement outlines the process and criteria for making such concessions, emphasising the importance of transparency and the opportunity for public consultation before the issuance of a TCO.
Scope and Application
The Customs Act 1901 applies to the procedure for granting tariff concession orders, which is overseen by the Chief Executive Officer of Customs. Specifically, this legislation allows for the application of lower rates of customs duty on certain goods through Tariff Concession Orders (TCOs). The application process involves submitting a request to the CEO, who must then determine whether the goods in question meet the core criteria set out in the Act, notably that no substitutable goods are produced in Australia. If the CEO finds that the application meets these criteria, they are mandated to issue a written order declaring that the goods in question are subject to a specific rate of duty as outlined in the Customs Tariff Act 1995. This process ensures that the application is transparent and allows for potential objections from interested parties, although in the case of TCO No. 1138060, no objections were received. The TCO does not affect pre-existing rights or impose liabilities on individuals, but it does provide benefits to importers who can apply for duty refunds on goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of the Customs Act 1901, as amended by Tariff Concession Instrument No. 1138060, include sections 269F, 269C, 269B, 269D, 269E, 269P, and 269SJ. Section 269F allows for the application of Tariff Concession Orders (TCOs) by any person seeking a lower rate of customs duty on specified goods. Section 269C outlines that a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Definitions for terms like "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269B, 269D, and 269E respectively. Section 269P(3) mandates the CEO to issue a written TCO if the application meets the criteria, while section 269SJ specifies goods that cannot be subject to a TCO.
The Act imposes several obligations and requirements on the parties involved. The CEO of Customs must assess whether an application for a TCO meets the core criteria, ensuring that no substitutable goods are produced in Australia at the time of application. If the criteria are met, the CEO must make a written TCO. The applicant, in this case Yamaha Motor Australia, must provide all necessary information to substantiate their application. The CEO is also required to publish a notice in the Gazette inviting submissions from any interested parties, although no submissions were received in this instance.
Section 269S(1) of the Act stipulates that a TCO comes into effect on the day the application is lodged. This means that the TCO in question, No. 1138060, is considered effective from 15 November 2011, the date Yamaha Motor Australia lodged their application. The TCO does not affect any existing rights of persons, except to the benefit of importers who can apply for a refund of duty on goods imported since the effective date. Importantly, the TCO does not impose any liabilities on any person, including the applicant.
Breaching the provisions of the Customs Act 1901 or failing to comply with a TCO can lead to both civil and criminal consequences. While specific offences, penalties, and maximum penalties are not detailed in the explanatory statement, general provisions within the Customs Act outline potential sanctions. These could include fines, imprisonment, or both, depending on the severity and intent behind the breach. Compliance with TCOs is crucial to avoid any legal repercussions or financial penalties that may arise from non-compliance with the Act’s stipulations.