EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0514271
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.
Bose Pty Ltd applied for a TCO in respect of certain TV speaker sets on 20 December 2005.
Instrument
TCO No 0514271 was made on 10 March 2006. It declares that those certain TV speaker sets 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. 0514271 is taken to have come into force on 20 December 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. 0514271, enacted in 2006 under the Customs Act 1901, aims to address the issue of providing tariff concessions for certain imported goods by allowing the Chief Executive Officer of Customs to reduce the rate of customs duty. This legislation was introduced to provide a more competitive environment for businesses by ensuring that certain goods, for which no locally produced substitutes exist, are subject to lower customs duties. The policy objective is to facilitate the import of goods that are not domestically produced, thereby encouraging competition and potentially lowering consumer prices. The Instrument was made in response to an application from Bose Pty Ltd for tariff concessions on certain TV speaker sets, reflecting the broader intent of the Customs Act 1901 to balance trade interests with domestic economic policies.
Scope and Application
The Tariff Concession Instrument No. 0514271 under the Customs Act 1901 applies to the specific goods for which Bose Pty Ltd applied for a Tariff Concession Order (TCO), which in this case were certain TV speaker sets. The Act is relevant to any person or entity applying for a TCO for goods not specified in section 269SJ of the Act, which prohibits certain goods from being subject to a TCO. The application of the Act is overseen by the Chief Executive Officer of Customs (CEO) who must determine if the application meets the core criteria as outlined in section 269C of the Act, specifically assessing whether substitutable goods are produced in Australia. The geographic reach of this legislation is national, extending across all states and territories of Australia as it falls under Commonwealth jurisdiction. The Act does not specify any exclusions or exemptions beyond those outlined in section 269SJ, and the application of the TCO is effective from the date the application was lodged. The CEO is required to publish a notice in the Gazette inviting submissions if a TCO application is accepted as valid, although in this instance, no submissions were received. The TCO does not impose any new liabilities and benefits importers by potentially allowing them to apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of this legislation, namely Tariff Concession Instrument No. 0514271 under the Customs Act 1901, primarily focus on the process of granting tariff concessions for specific goods. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of certain goods. If the application meets the core criteria, as outlined in section 269C, the CEO must make a written order (section 269P(3)) that specifies the lower rate of customs duty applicable to the goods in question. This process is contingent upon no substitutable goods being produced in Australia, as defined in section 269D and section 269E. In this specific case, Bose Pty Ltd applied for a TCO for certain TV speaker sets, and the CEO subsequently issued TCO No. 0514271, declaring that the goods are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free instead of the general rate of 5%.
The Act imposes several obligations and requirements on the parties involved. Firstly, any person seeking a tariff concession must ensure that their application meets the core criteria, which includes verifying that no substitutable goods are produced in Australia. The CEO has the responsibility of reviewing applications to determine if they meet these criteria and must also publish a notice in the Gazette inviting submissions from any interested parties (section 269K(1)). In this instance, Bose Pty Ltd would have needed to confirm that no substitutable goods were being produced in Australia, while the CEO had to review the application and subsequently publish a notice without receiving any objections. Additionally, the Act ensures that the TCO does not affect the rights of any person as at the date of registration, thus protecting the rights of importers and allowing them to apply for a refund of duty.
In terms of consequences for non-compliance or breach of the Act, it is crucial to note that the document does not specify any explicit offences, penalties, or civil/criminal consequences for failing to adhere to the requirements of the TCO process. However, the Act ensures that the rights of individuals are not adversely affected by the TCO, and it explicitly states that no liabilities are imposed on any person. It is possible that breaches of the Customs Act or related regulations could lead to penalties, but these are not detailed within the scope of this specific legislation.