EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0509993
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.
Mondami Pty Ltd applied for a TCO in respect of certain security access enclosures on 28 July 2005.
Instrument
TCO No 0509993 was made on 21 October 2005. It declares that those certain security access enclosures 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. 0509993 is taken to have come into force on 28 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 Tariff Concession Instrument No. 0509993, enacted under the Customs Act 1901, was introduced to provide a mechanism for the Chief Executive Officer of Customs to grant tariff concessions on certain goods. This legislation responds to the need for flexibility in the application of customs duties, particularly where no substitutable goods are produced in Australia, thus allowing for lower rates of duty on specified items. The policy objective is to facilitate the importation of goods that cannot be readily substituted by domestic production, thereby promoting trade and potentially reducing costs for businesses and consumers.
The instrument was established to provide a streamlined process for businesses to apply for tariff concessions, ensuring that applications are evaluated against specific criteria set out in the Customs Act. The instrument came into force on 28 July 2005, the date the application was lodged by Mondami Pty Ltd for security access enclosures. The tariff rate for these goods was reduced from 5% to free, reflecting the absence of local production of substitutable goods. The process included a public consultation period, during which no submissions were received, highlighting the unopposed nature of this particular concession.
Scope and Application
The Tariff Concession Instrument No. 0509993 is an instrument under Part XVA of the Customs Act 1901, which facilitates the application of a lower rate of customs duty to specific goods through Tariff Concession Orders (TCOs) made by the Chief Executive Officer of Customs. This legislation applies to entities or individuals who seek tariff concessions for goods not produced in Australia that are the subject of a valid application meeting the core criteria specified in the Act. These criteria include ensuring that no substitutable goods are produced in Australia on the day the application was lodged, and the goods must correspond to a prescribed item in Schedule 4 of the Customs Tariff Act 1995. The geographic reach of this Act is national, as it pertains to goods entering Australia. There are exclusions as outlined in section 269SJ of the Customs Act 1901, which lists goods that cannot be subject to a TCO. The Act allows for the extension or restriction of its application through subordinate instruments, such as regulations that detail the process for applying and the implications of the concessions granted.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0509993 under the Customs Act 1901 (section 269F) and Customs Tariff Act 1995 require the Chief Executive Officer of Customs (CEO) to consider applications for Tariff Concession Orders (TCO) for goods that may benefit from a reduced rate of customs duty. If the CEO determines that the application meets the core criteria (section 269C), which include the absence of substitutable goods produced in Australia, a TCO will be issued. For instance, Mondami Pty Ltd's application for certain security access enclosures was accepted, resulting in TCO No. 0509993, which set the duty rate for these goods at free, down from the general rate of 5% (section 269P(3)).
The Act imposes several obligations on the parties involved. The CEO must ensure that the application is not for goods that cannot be subject to a TCO (section 269SJ) and must publish a notice in the Gazette inviting submissions from any interested parties (subsection 269K(1)). The CEO must also decide whether the application meets the core criteria. In this case, Mondami Pty Ltd's application was accepted, and no submissions opposing the TCO were received. Additionally, the TCO does not affect the rights of any person as at the date of registration in a way that disadvantages them or imposes liabilities for actions taken before the TCO was registered (subsection 269S(1)).
Should there be a breach of the obligations or requirements set forth in the Customs Act 1901 or any related regulations, various civil and criminal consequences may apply. While the specific penalties are not detailed in the explanatory statement, breaches of customs regulations generally attract penalties that can include fines and imprisonment, depending on the severity and intent of the breach. The exact penalties would be determined in accordance with the broader provisions of the Customs Act and associated legislation.
The Tariff Concession Instrument No. 0509993, by providing a concessional rate for certain security access enclosures, aims to benefit importers who may now be eligible for duty refunds on goods imported since the TCO came into effect on 28 July 2005. This legislative action ensures that the importer's rights are positively impacted without imposing any new liabilities on them.