EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516603
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 MP3 player speakers on 23 November 2005.
Instrument
TCO No 0516603 was made on 6 February 2006. It declares that the certain MP3 player speakers are good 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. 0516603 is taken to have come into force on 23 November 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. 0516603, enacted in 2006 under the Customs Act 1901, addresses the need for tariff concessions on specific goods, in this case certain MP3 player speakers, by establishing a framework through which businesses can apply for lower customs duties. The Customs Act 1901, managed by the Parliament, empowers the Chief Executive Officer of Customs to create Tariff Concession Orders (TCOs) when certain criteria are met, ensuring that no substitutable goods are produced in Australia. The primary policy objective is to foster economic efficiency and competitiveness by potentially reducing the cost of imported goods, thereby benefiting importers who can seek duty refunds on goods imported since the TCO's effective date. The instrument came into force on the date the application was lodged, ensuring that the rights of importers are protected and no new liabilities are imposed on any person other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0516603 under the Customs Act 1901 applies to specific goods, in this case certain MP3 player speakers, for which Bose Pty Ltd applied for tariff concessions. This application process is governed by the Act, which allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that provide for a lower rate of customs duty on goods not produced in Australia in the ordinary course of business. The CEO must ensure that the application meets the core criteria, primarily that no substitutable goods are produced in Australia, before making a TCO. The TCO is effective from the date the application was lodged, which in this case was 23 November 2005, and it does not affect the rights of any person as at the date of registration in a way that would disadvantage them or impose new liabilities. The TCO applies to the Commonwealth jurisdiction and extends its reach nationally. The rights of importers are beneficially affected as they can apply for a refund of duty on goods imported since the TCO came into force. The TCO does not impose any liabilities on any person.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0516603, as referenced in the Explanatory Statement, include section 269C, section 269P(3), and section 269S(1) of the Customs Act 1901. Section 269C of the Act specifies that a Tariff Concession Order (TCO) application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P(3) provides that if the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria, they must make a written order (a TCO) declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. Section 269S(1) states that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged.
The Act imposes several obligations and requirements on the parties and entities it governs. For example, section 269K(1) mandates that the CEO must publish a notice in the Gazette, inviting submissions from any person who believes there are reasons why the TCO should not be made, as soon as practicable after accepting a TCO application as valid. The Act also requires the CEO to determine whether the application meets the core criteria, as outlined in section 269C, before making a TCO. Additionally, section 269SJ sets out goods that cannot be subject to a TCO, thereby restricting the scope of the concessions.
Breach of the provisions in the Customs Act 1901, including those related to the making of TCOs, may result in various penalties and consequences. While the explanatory statement does not explicitly detail penalties, the general legal framework implies that non-compliance with the Act could lead to civil or criminal liability, depending on the nature and severity of the breach. The maximum penalties for breaches of the Customs Act 1901 can include fines and imprisonment, although specific penalties would depend on the particular offence and applicable legislation. The Act's provisions are designed to ensure that the tariff concession scheme operates fairly and efficiently, thereby protecting both the interests of the Commonwealth and those of legitimate importers.