EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1140595
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.
Bombardier applied for a TCO in respect of certain master controllers on 06 December 2011.
Instrument
TCO No 1140595 was made on 06 March 2012. It declares that those certain master controllers 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. 1140595 is taken to have come into force on 06 December 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, provides for the regulation of customs duties and other import-related matters. The Act establishes a framework for the application of tariff concession orders (TCOs), which allow for reduced customs duty rates on certain goods, provided specific criteria are met. Tariff Concession Instrument No. 1140595, issued under this Act, addresses the need for streamlined and efficient processes in applying for and granting tariff concessions. The policy objective of this instrument is to facilitate the importation of specific goods, in this case, certain master controllers, by granting them tariff concessions to benefit importers and potentially stimulate economic activity by reducing the cost of these goods. This instrument was introduced without any adverse impact on the rights of non-Commonwealth entities, ensuring that the process respects pre-existing rights and does not impose new liabilities.
Scope and Application
The Tariff Concession Instrument No. 1140595, under the Customs Act 1901, pertains to the application of Tariff Concession Orders (TCOs) concerning certain master controllers. The Act applies to any person or entity seeking to import goods that can benefit from a lower rate of customs duty when a TCO is in effect. The TCO mechanism is managed by the Chief Executive Officer of Customs (CEO) and is applicable to goods that meet specific criteria, notably where no substitutable goods are produced in Australia. This concession is geographically comprehensive, applying across Australia as a national measure. The TCO excludes goods specified in section 269SJ of the Act, which cannot be subject to such orders. The application and effect of the TCO are detailed in the Customs Tariff Act 1995, which schedules the specific tariff items. The CEO is required to publish notices in the Gazette to invite submissions on TCO applications, although no submissions were received in this instance. The TCO is deemed to come into effect on the date the application was lodged, providing benefits to importers by potentially allowing them to apply for duty refunds on goods imported since the TCO's effective date. This legislative instrument does not impose any liabilities on persons other than the Commonwealth nor does it affect pre-existing rights adversely.
Key Provisions
The Customs Act 1901, specifically under Part XVA, outlines the procedure and criteria for issuing Tariff Concession Orders (TCOs), which provide lower customs duty rates for certain goods. Section 269F allows any person to apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning specified goods. To be considered, the application must not be for goods listed in section 269SJ, which are excluded from TCO eligibility. The CEO must then assess whether the application meets the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the date of the application. Definitions for "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269B, respectively.
The obligations under the Act require the CEO to publish a notice in the Gazette once a TCO application is accepted as valid, inviting any interested party to lodge a submission opposing the TCO. In this instance, no submissions were received. Upon determining that the application meets the core criteria, the CEO must issue a written TCO, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applicable to the goods. The TCO comes into force on the date the application was lodged, as stipulated in subsection 269S(1). Importantly, the TCO does not disadvantage or impose liabilities on any person for actions taken before the TCO's registration date, but it does entitle importers to apply for duty refunds on goods imported since the TCO's effective date, as per paragraph 126(1)(r) of the Regulations.
In terms of penalties and consequences, the Act does not explicitly state offences or penalties for breaches related to TCO applications. However, any non-compliance with the terms and conditions of the TCO, such as misrepresentation or fraudulent claims for duty refunds, could potentially lead to civil or criminal actions under other relevant sections of the Customs Act or other applicable laws. The maximum penalties for such offences would depend on the specific nature and severity of the breach, as outlined in the broader legislative framework.