EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516882
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.
Elsema Pty Ltd applied for a TCO in respect of certain wireless receivers on 28 November 2005.
Instrument
TCO No 0516882 was made on 13 February 2006. It declares that those certain wireless receivers 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. 0516882 is taken to have come into force on 28 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. 0516882, enacted in 2006, serves to address specific gaps in the Customs Act 1901 by facilitating tariff concessions for particular goods, in this case, certain wireless receivers, to which a lower rate of customs duty applies. This legislation was enacted by the Australian government, specifically through the Customs Act 1901, which was amended to include provisions for tariff concessions. The primary policy objective behind this legislation is to encourage the import and use of specific goods by reducing the customs duty burden, thereby potentially stimulating economic activity and market competition. The instrument ensures that these tariff concessions are granted only if no substitutable goods are produced in Australia, thereby safeguarding local industries from undue competition.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCO) scheme, applies to individuals and entities seeking lower rates of customs duty on specific goods by applying for such concessions. The Act's provisions, particularly sections 269C, 269B, and 269P, establish the criteria for the approval of TCO applications, focusing on the absence of substitutable goods produced in Australia at the time of application. The geographic reach of this legislation is national, as the Act operates under the Commonwealth's authority, and its application extends to all goods imported into Australia. However, certain goods are explicitly excluded from TCO consideration under section 269SJ. The commencement of a TCO, such as Tariff Concession Order No. 0516882, is effective from the date the application was lodged, in this case, 28 November 2005. Importantly, the Act ensures that the rights of individuals and entities are not adversely affected by the retroactive application of a TCO, and it also provides a mechanism for importers to claim refunds on duties paid prior to the TCO's effective date.
Key Provisions
The Tariff Concession Instrument No. 0516882 under the Customs Act 1901 primarily concerns the application and granting of a Tariff Concession Order (TCO) for certain wireless receivers. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO, which would then apply a lower rate of customs duty to the specified goods. The CEO is mandated to consider such applications, provided they do not pertain to goods outlined in section 269SJ, which cannot be subject to a TCO. If the CEO finds that the application meets the core criteria under section 269C, meaning no substitutable goods were produced in Australia on the date of the application, they must issue a written TCO (section 269P(3)).
The obligations under the Act require the CEO to evaluate the application's compliance with the core criteria and publish a notice in the Gazette inviting submissions from interested parties (subsection 269K(1)). For the TCO No. 0516882, no submissions were received in response to this invitation. The TCO is effective from the date the application was lodged (subsection 269S(1)), which in this case was 28 November 2005. The TCO does not adversely affect the rights of any person as at the date of registration or impose any liabilities on anyone in relation to actions taken before the registration date.
In terms of penalties and consequences, the Act does not specify criminal or civil penalties for breaches directly related to the TCO process. However, failure to comply with the requirements set out in the Act or the Regulations, such as not adhering to the terms of a TCO or making false statements in an application, could lead to administrative penalties or legal actions under other provisions of the Customs Act or related legislation. For example, knowingly making false statements could potentially attract penalties under section 267 of the Customs Act, which can include fines of up to $22,200 for individuals and $111,000 for corporations, depending on the severity and intent of the offence.