EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0410976
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.
Foxtel Management Pty Ltd applied for a TCO in respect of certain digital pay television receivers and/or decoders on 21 October 2004.
Instrument
TCO No 0410976 was made on 21 January 2005. It declares that those certain digital pay television receivers and/or decoders are goods to which item 50A 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 0%.
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. 0410976 is taken to have come into force on 21 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 Customs Act 1901, enacted by the Commonwealth Parliament, provides the framework for a scheme under which Tariff Concession Orders (TCOs) may be made to reduce customs duty on specific goods. The problem or gap this legislation addresses is the potential for economic disadvantage where no suitable Australian-produced substitutes exist for imported goods. The Act allows the Chief Executive Officer of Customs to grant tariff concessions if certain criteria are met, promoting competitive imports where Australian production is lacking. Tariff Concession Instrument No. 0410976, made under this Act, reduces the duty on certain digital pay television receivers and/or decoders to zero, effective from the date of application, October 21, 2004. This measure aims to benefit importers and potentially consumers by reducing the cost of these goods, without imposing any new liabilities on individuals or entities.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to any individual or entity seeking to import goods into Australia, provided that the goods do not fall under the specific exclusions outlined in section 269SJ of the Act. The application process requires that the goods in question do not have substitutable alternatives produced in Australia at the time of application, as defined by sections 269C, 269D, 269E, and 269F. The TCO applies across the Commonwealth of Australia and impacts the import duties on specified goods, offering a concessional rate of duty as determined by the Tariff Concession Order. Notably, the Act mandates public consultation through the Gazette, although no submissions were received in response to the specific TCO No. 0410976 concerning digital pay television receivers and decoders. The TCO came into effect on the date the application was lodged, retroactively benefiting importers by allowing duty refunds under the relevant regulations.
Key Provisions
The Tariff Concession Instrument No. 0410976, made under section 269F of the Customs Act 1901 (the Act), specifies that certain digital pay television receivers and/or decoders are subject to a tariff concession order (TCO) effective from 21 October 2004 (subsection 269S(1)). These goods are now subject to a zero per cent customs duty rate, as opposed to the general rate of 5% (section 269P(3)). This means that any importer of these goods will not be required to pay customs duty, provided the import occurred after the effective date of the TCO.
The Act imposes specific obligations on the Chief Executive Officer of Customs (the CEO) when considering a TCO application. Under section 269C, the CEO must first determine whether the application meets the core criteria, which include the absence of substitutable goods produced in Australia on the day the application was lodged. Substitutable goods, as defined in section 269D, are those produced in Australia that can be used in the same way as the goods for which the TCO is sought. If the CEO is satisfied that the application meets the core criteria, they must make a written TCO order (section 269P(3)).
Upon accepting a valid TCO application, the CEO is required to publish a notice in the Gazette, inviting any person who believes the TCO should not be granted to lodge a submission (subsection 269K(1)). In this instance, no submissions were received in response to the notice. This transparent process ensures that all relevant stakeholders have the opportunity to provide input before the TCO is finalised.
There are no specified offences or penalties in the legislation for failing to comply with the requirements of a TCO. However, any breach of the Customs Act 1901 or the Customs Regulations 1993 could result in civil or criminal penalties. For example, knowingly importing goods in a way that contravenes the Act could lead to penalties of up to 10,000 penalty units or imprisonment for five years, or both, under section 240AC of the Act. It is crucial for importers and other affected parties to ensure compliance with all relevant customs laws and regulations to avoid these consequences.