EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0508913
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.
Toshiba Australia Pty Ltd applied for a TCO in respect of certain storer and reproducer recorders on 12 July 2005.
Instrument
TCO No 0508913 was made on 16 September 2005. It declares that those certain storer and reproducer recorders 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. 0508913 is taken to have come into force on 12 July 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 a framework for the regulation of customs and excise in Australia. Specifically, Part XVA of the Act facilitates the establishment of Tariff Concession Orders (TCOs) which allow for reduced customs duty rates on certain goods. The act addresses the gap in providing economic relief and incentivising the importation of specific goods not produced domestically by enabling the Chief Executive Officer of Customs to grant tariff concessions under certain conditions. Policy objectives include promoting competition, encouraging the import of goods that are not domestically produced, and potentially stimulating economic activity by making imported goods more affordable. The Tariff Concession Instrument No. 0508913, made in 2005, exemplifies this process by granting a tariff concession for certain storer and reproducer recorders, setting their duty rate at free, down from the general rate of 5%.
Scope and Application
The Tariff Concession Instrument No. 0508913 is a specific measure under the Customs Act 1901 that pertains to the application of lower rates of customs duty on particular goods. This instrument applies to entities or individuals who import certain storer and reproducer recorders into Australia, and it benefits those who import these goods by allowing them to pay no customs duty on these items, provided that no substitutable goods were produced in Australia on the date the application was lodged. The geographic reach of this legislation is national, as it applies to all importers across Australia. The application of this instrument is strictly regulated under the Customs Act 1901 and is contingent on the core criteria specified within the Act, including the absence of substitutable goods produced in Australia. The instrument came into force on 12 July 2005, the date the application for the tariff concession was lodged. Importantly, the TCO does not retroactively disadvantage any person or impose liabilities for actions taken prior to its registration, thus protecting the rights of importers and ensuring that they can apply for a refund of duty for goods imported since the effective date of the TCO.
Key Provisions
The Tariff Concession Instrument No. 0508913, made under the Customs Act 1901 (the Act), pertains to Tariff Concession Orders (TCOs) which reduce the rate of customs duty on specified goods. The main operative sections of this instrument include section 269C, which outlines the core criteria that must be met for an application to be approved, and section 269P, which mandates the CEO to issue a written TCO if the application meets these criteria. Specifically, section 269C requires that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P(3) then mandates the CEO to issue a TCO if the application meets these criteria, declaring the goods to which a specific item of Schedule 4 to the Customs Tariff Act 1995 applies.
This Act imposes several obligations and requirements on the parties involved. Firstly, the CEO is required to assess the validity of TCO applications against the core criteria, as stipulated in section 269C. If the application meets these criteria, the CEO must issue a written TCO, as per section 269P. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections to the TCO, as outlined in section 269K. For Toshiba Australia Pty Ltd, the applicant in this case, the obligation is to ensure that their application complies with the requirements of section 269C and to provide any necessary information to support their application.
Breaching the conditions set by the Customs Act 1901 can lead to various legal consequences. Firstly, any misrepresentation or false information in an application could be considered an offence under section 276 of the Act, which carries a maximum penalty of 10,000 penalty units for individuals and 50,000 penalty units for corporations. Moreover, any person found to have contravened a TCO could face penalties, including fines and potential criminal charges. The Act also provides for civil remedies, such as injunctions or damages, for any person adversely affected by the improper application of a TCO. These penalties underscore the importance of compliance with the Act's provisions and the need for accurate and truthful information in TCO applications.