EXPLANATORY STATEMENT
Tariff Concession Instrument No.0501102
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.
Bang and Olufsen Unit Trust applied for a TCO in respect of certain active loudspeakers on 21 January 2005.
Instrument
TCO No 0501102 was made on 18 April 2005. It declares that those certain active loudspeakers 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 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 No0501102 is taken to have come into force on 21 January 2005.
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, provides for the imposition of customs duty on imported goods. Part XVA of the Act outlines the scheme for Tariff Concession Orders (TCOs), which allow for a reduced rate of customs duty on specified goods if certain criteria are met. This scheme was introduced to address the issue of potentially high customs duties on goods for which no Australian-produced substitutes exist, thereby supporting competitive markets and encouraging efficient use of resources. The Tariff Concession Instrument No. 0501102, made by the Chief Executive Officer of Customs under section 269F of the Act, was issued in response to an application by Bang and Olufsen Unit Trust for tariff concessions on certain active loudspeakers. The CEO determined that no substitutable goods were produced in Australia, meeting the core criteria set out in section 269C of the Act, and subsequently reduced the duty on these goods from 5% to 3%. This instrument came into effect on 21 January 2005, the date the application was lodged, and does not impose any liabilities on persons other than the Commonwealth or affect existing rights adversely.
Scope and Application
The Tariff Concession Instrument No. 0501102 under the Customs Act 1901 applies to certain active loudspeakers that Bang and Olufsen Unit Trust sought a tariff concession for. This legislation affects importers of these specific goods by providing them with a lower rate of customs duty, as determined by the Chief Executive Officer of Customs (CEO) upon finding that no substitutable goods were produced in Australia at the time of the application. The concession modifies the duty rate from the general 5% to a reduced rate of 3% for these goods, as per item 50 of Schedule 4 to the Customs Tariff Act 1995. This Act operates on a national level within Australia and is not restricted by state or territory boundaries. The legislation does not impose any liabilities on any person and does not disadvantage any rights as at the date of registration. The scope of the Act can be extended or modified through subordinate instruments, ensuring flexibility in addressing similar future applications.
Key Provisions
The primary operative sections of this Tariff Concession Instrument, specifically TCO No 0501102, are sections 269C, 269B, 269E, 269F, 269P, and 269S of the Customs Act 1901, alongside relevant provisions of the Customs Tariff Act 1995. Section 269F allows an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in relation to specified goods. If the CEO determines that the application meets the core criteria as outlined in section 269C, they must issue a TCO, which effectively lowers the customs duty rate on the specified goods. Section 269P(3) mandates that the CEO must make a written order declaring the applicable duty rate if satisfied that the application meets the criteria. This TCO then applies to the goods from the date of the application, as stipulated in section 269S(1).
The Act imposes several obligations on both the applicant and the CEO. The applicant must ensure that their application is made in accordance with the provisions of section 269F, providing all necessary information and meeting the criteria set out in sections 269B and 269C. The CEO is obligated to review the application promptly and determine if it meets the core criteria. If satisfied, the CEO must issue a TCO as required by section 269P(3). Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be made, as required by subsection 269K(1).
Failure to comply with the requirements of the Customs Act 1901 and associated regulations can result in various consequences. For instance, if an individual or entity submits a false application or provides misleading information, they could face criminal charges under section 276 of the Act, which carries a maximum penalty of 2,000 penalty units or imprisonment for five years, or both. Similarly, the CEO who fails to properly assess an application or issue a TCO when required may face disciplinary action or legal repercussions. Civil penalties may also apply for non-compliance, including fines and potential legal action to rectify breaches of the Act.
Importers and other relevant parties must be aware of their rights and obligations under the TCO. For example, importers can apply for a refund of duty paid on goods imported since the TCO came into effect, as per paragraph 126(1)(r) of the Regulations. This refund mechanism is crucial for ensuring that importers are not disadvantaged by the changes in duty rates. Conversely, the TCO does not impose any new liabilities on any person other than the Commonwealth, protecting existing rights and obligations as per the provisions in the Act.