EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0410872
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.
Hospitality and Gaming Investments Pty Ltd applied for a TCO in respect of certain driver safety warning detectors on 18 October 2004.
Instrument
TCO No 0410872 was made on 4 January 2005. It declares that those certain driver safety warning detectors 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 10%. The rate of duty for the goods subject to the TCO is 3%.
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.0410872 is taken to have come into force on 18 October 2004.
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. 0410872, enacted under the Customs Act 1901, addresses the need for a mechanism to provide tariff concessions for specific imported goods, thereby reducing the customs duty applicable to those goods. This legislation allows the Chief Executive Officer of Customs to make Tariff Concession Orders, which apply lower rates of duty to certain goods if no substitutable goods are produced in Australia. The instrument was introduced to foster fair trade practices and support economic efficiency by ensuring that imported goods are competitively priced relative to locally produced alternatives. The policy objective is to encourage trade and investment by making imported goods more affordable without unduly disadvantaging Australian producers. This approach is consistent with broader trade policies aimed at enhancing market access and reducing trade barriers.
The instrument was developed following an application by Hospitality and Gaming Investments Pty Ltd for tariff concessions on certain driver safety warning detectors. The CEO of Customs determined that no substitutable goods were produced in Australia, thus satisfying the core criteria set out in the Customs Act 1901. Consequently, TCO No. 0410872 was issued, reducing the duty rate for these detectors from 10% to 3%. The instrument took effect from the date of the application, 18 October 2004, and no submissions were received in opposition to the concession. This legislative measure ensures that importers of the specified goods can benefit from the reduced duty rate, potentially stimulating demand and investment in these products.
Scope and Application
The Customs Act 1901, under its Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders apply a reduced rate of customs duty to specified goods, contingent on the absence of substitutable goods being produced in Australia in the ordinary course of business. Hospitality and Gaming Investments Pty Ltd successfully applied for a TCO concerning certain driver safety warning detectors, resulting in a reduced duty rate from 10% to 3%. The TCO was published in the Gazette with an invitation for submissions, though none were received. The TCO's effective date aligns with the application date, 18 October 2004, without retroactive effect on existing rights or liabilities, thereby potentially benefiting importers by enabling them to apply for duty refunds from that date. The scope of this legislation is national, applying across the Commonwealth of Australia, and its application may be further detailed or modified through subordinate instruments.
Key Provisions
The Tariff Concession Instrument No. 0410872 under the Customs Act 1901 (section 269F) provides the operational framework for the application and approval of Tariff Concession Orders (TCOs). Essentially, this legislation allows for a reduction in customs duty on certain goods, provided they meet specific criteria outlined in the Act. Specifically, section 269C of the Act stipulates that a TCO application will be considered if, on the date of application, there are no substitutable goods produced in Australia in the ordinary course of business. This means that if the goods in question are not being produced domestically and there is no equivalent product available in Australia, a TCO can be issued.
The Act imposes several obligations on the parties involved. The Chief Executive Officer (CEO) of Customs is required to assess applications for TCOs against the criteria set out in section 269C. If the application meets these criteria, the CEO must make a written order declaring that the specified goods are subject to the prescribed tariff concession (section 269P(3)). Furthermore, section 269K(1) mandates that the CEO publish a notice in the Gazette inviting submissions from any interested parties who believe the TCO should not be made. Although in this case, the CEO did not receive any submissions, this requirement ensures transparency and allows for potential objections to be aired.
Failure to comply with the requirements and obligations set out in the Customs Act 1901 may result in legal consequences. For instance, section 269SJ specifies goods that cannot be subject to a TCO, and any attempt to apply for a TCO for these goods would be in violation of the Act. While the explanatory statement does not detail specific penalties for breaches, the Act generally provides for both civil and criminal penalties for non-compliance with customs regulations. These penalties can include fines and imprisonment, depending on the severity of the breach. The exact penalties would be determined by the courts, but they can be significant given the regulatory nature of customs duties and concessions.