EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0506269
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.
Conexus Pty Ltd applied for a TCO in respect of certain portable multimedia loudspeakers on 26 May 2005.
Instrument
TCO No 0506269 was made on 11 November 2005. It declares that those certain portable multimedia 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 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. One submission objecting to the TCO application was received from Legend Acoustics.
Further, subsection 269M(1) of the Act provides that if the CEO considers that, in relation to a particular TCO application, a person may have reason to oppose the making of the TCO to which the application relates, he or she may, by notice in writing, invite the person to lodge a written submission with the CEO. The CEO invited Sonique Audio, Fine Audio International, Legend Acoustics, Duntech Audio and Subsonic Creations Audio to lodge a written submission.
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. 0506269 is taken to have come into force on 26 May 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 was enacted by the Parliament of Australia and establishes a framework for managing customs duties in Australia. The Tariff Concession Instrument No. 0506269, introduced in 2005, addresses the need for concessional tariff rates on specific imported goods that are not produced domestically or for which there are no suitable substitutes produced in Australia. This instrument facilitates the application process for tariff concessions, ensuring that importers of specified goods can benefit from reduced duty rates when no comparable Australian-made alternatives exist. The policy objective is to support the importation of goods that are essential but not manufactured locally, thereby encouraging trade and potentially lowering costs for consumers and businesses.
Scope and Application
The Tariff Concession Instrument No. 0506269 applies to the specific goods mentioned in the instrument, namely certain portable multimedia loudspeakers, and is part of the broader framework established under Part XVA of the Customs Act 1901. This Act enables the Chief Executive Officer of Customs to grant tariff concessions on goods, which results in a lower rate of customs duty for the specified items. The Act applies to any person or entity wishing to import the specified goods into Australia and is governed at the national level under the Commonwealth jurisdiction. The application of this tariff concession is contingent on the CEO being satisfied that no substitutable goods are being produced in Australia, as defined by sections 269C, 269D, and 269E of the Act. Additionally, the Act excludes certain goods from being subject to a tariff concession, as outlined in section 269SJ. The application process involves an assessment of core criteria and an opportunity for public consultation, which was followed in the case of the concession for the portable multimedia loudspeakers, where an objection was received from Legend Acoustics. The commencement of this particular TCO aligns with the date the application was lodged, 26 May 2005, and does not affect any pre-existing rights or liabilities of parties other than the Commonwealth.
Key Provisions
The Tariff Concession Instrument No. 0506269 (the Instrument) under the Customs Act 1901 (the Act) provides for a tariff concession order (TCO) for certain portable multimedia loudspeakers, as applied for by Conexus Pty Ltd. Pursuant to section 269P(3) of the Act, the Chief Executive Officer of Customs (the CEO) made the TCO, declaring that the specified loudspeakers are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) applies, resulting in a concession on the duty rate from 5% to free (section 269P(3)). This means that the goods in question will now attract no customs duty as a result of the TCO, effective from the date the application was lodged (section 269S(1)).
The Act imposes several obligations on the CEO and other parties. For example, the CEO must ensure that the TCO application meets the core criteria set out in section 269C of the Act, which requires that no substitutable goods were produced in Australia on the day the application was lodged. Furthermore, the CEO must publish a notice in the Gazette and invite submissions from interested parties as per subsection 269K(1) and subsection 269M(1) of the Act, respectively. In this case, the CEO invited several entities, including Legend Acoustics, to lodge submissions, and one submission was received objecting to the TCO application.
Breach of the provisions of the Customs Act 1901 may result in various consequences. Firstly, section 126 of the Customs Regulations 1995 provides for the possibility of a refund of duty for importers of goods affected by the TCO, provided they apply within the stipulated time frame. Conversely, failure to comply with the Act may result in civil or criminal penalties. For example, section 247 of the Act allows for civil penalties for false statements or misleading information provided in connection with a TCO application, with a maximum penalty of 200 penalty units for individuals and 1,000 penalty units for corporations. Criminal penalties may also apply, such as imprisonment for up to two years for offences under section 249 of the Act, which pertains to the contravention of provisions related to the payment of duty.
In summary, the Tariff Concession Instrument No. 0506269 establishes a tariff concession for certain portable multimedia loudspeakers, effectively reducing the customs duty from 5% to free. The CEO of Customs is required to ensure that the TCO application meets the specified criteria and to invite submissions from interested parties. Non-compliance with the Act may lead to civil or criminal penalties, including fines and imprisonment.