EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1140596
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 desk interface on 06 December 2011.
Instrument
TCO No 1140596 was made on 06 March 2012. It declares that those certain desk interface 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. 1140596 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 was enacted by the Australian Parliament to provide for the regulation of customs and excise, including the imposition of customs duty on imported goods. The Act establishes a scheme under which Tariff Concession Orders (TCOs) may be made to provide tariff relief on certain goods. This relief is intended to assist businesses by reducing the cost of imported goods, thereby making them more competitive in the Australian market. The Tariff Concession Instrument No. 1140596, made under this Act, was introduced to provide tariff concessions on certain desk interfaces, recognising that no substitutable goods were produced in Australia, thereby meeting the core criteria set out in section 269C of the Act. The policy objective is to ensure that Australian businesses have access to competitively priced imported goods without the burden of customs duty, facilitating economic growth and consumer choice.
Scope and Application
The Tariff Concession Instrument No. 1140596 applies to individuals or entities seeking tariff concessions for specific goods, in this case, certain desk interfaces. This instrument is a direct application of the Customs Act 1901, administered by the Chief Executive Officer of Customs, and it is designed to provide a lower rate of customs duty for goods that meet the criteria outlined in the Act. The primary application of this legislation is to importers of the specified goods, which in this instance, are desk interfaces. The geographic and jurisdictional reach of this legislation is national, as it applies across Australia under the Commonwealth jurisdiction. The instrument does not apply to goods that are specified in section 269SJ of the Act, which are ineligible for tariff concessions. Furthermore, the legislation specifies that no person (other than the Commonwealth) will be disadvantaged or subjected to liabilities for actions taken prior to the registration of the tariff concession. The CEO is mandated to publish notices in the Gazette to invite submissions regarding the proposed tariff concession, although in this case, no submissions were received. The tariff concession comes into force on the date the application was lodged, which was 06 December 2011 for this instrument.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Order (TCO) No. 1140596, involve the application and granting of tariff concessions for certain goods. Under section 269F of the Customs Act 1901, an applicant may apply for a TCO, provided the goods are not specified in section 269SJ, which lists goods ineligible for a TCO. If the Chief Executive Officer (CEO) of Customs determines that the application meets the core criteria set out in section 269C, they must make a written TCO order. This specific TCO No. 1140596 pertains to certain desk interfaces, and it was made on 6 March 2012, declaring that these items are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with a duty rate of free instead of the general rate of 5%.
The obligations imposed by this Act on the parties involved include the requirement for the CEO to assess applications against the core criteria, particularly ensuring no substitutable goods are produced in Australia. The CEO must also publish notices in the Gazette to invite objections or submissions regarding the TCO application. In this case, the CEO published a notice regarding Bombardier’s application but did not receive any submissions. Once the TCO is issued, it comes into force on the date the application was lodged, which in this instance was 6 December 2011.
The Act also establishes specific rights and protections. For instance, it ensures that the TCO does not disadvantage any person or impose liabilities on them in respect of actions taken before the TCO's effective date. Importers of the affected goods benefit from this, as they can apply for duty refunds for goods imported since the TCO's effective date under paragraph 126(1)(r) of the Regulations. The Act emphasizes that the TCO does not impose any new liabilities on any person, thereby maintaining a clear boundary of its impact.
In terms of consequences, the Act outlines both civil and potential criminal penalties for breaches. Although the specific penalties are not detailed in this excerpt, it is understood that non-compliance with the terms of the TCO or the application process could lead to legal ramifications. The CEO is mandated to enforce the Act’s provisions rigorously, and any failure to adhere to the stipulated guidelines could result in penalties as prescribed by law. The Act thus serves to regulate the tariff concession process meticulously while ensuring compliance and protecting the rights of all involved parties.