EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0602558
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.
Hagemeyer Appliances applied for a TCO in respect of certain colour television receivers on 18 January 2006.
Instrument
TCO No 0602558 was made on 7 April 2006. It declares that those certain colour television 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 0%.
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. 0602558 is taken to have come into force on 18 January 2006.
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, addresses the need for a systematic approach to the application and granting of tariff concession orders (TCOs) for imported goods. This legislation allows the Chief Executive Officer of Customs to implement reduced customs duties on specific goods, provided they meet certain criteria. The Act was designed to streamline the process for businesses seeking tariff reductions and to ensure that the concessions are granted only when no substitutable goods are produced in Australia. The underlying policy objective is to facilitate trade by reducing the cost of imported goods for businesses, thereby supporting economic activity and competition within the market.
The instrument, Tariff Concession Instrument No. 0602558, made under the Customs Act 1901, was introduced to provide tariff concessions for certain colour television receivers. Hagemeyer Appliances applied for this concession on 18 January 2006, and after the CEO of Customs was satisfied that no substitutable goods were produced in Australia, a TCO was issued on 7 April 2006. This order resulted in a reduction of the customs duty from the general rate of 5% to 0% for the specified goods. The instrument came into effect on the date of the application, 18 January 2006, without retroactively affecting any pre-existing rights or imposing new liabilities.
Scope and Application
The Tariff Concession Instrument No. 0602558 applies to individuals or entities seeking tariff concessions on certain goods under the Customs Act 1901. Specifically, it pertains to Hagemeyer Appliances' application for a Tariff Concession Order (TCO) in relation to certain colour television receivers, seeking a reduction in customs duty rates from the general 5% to 0%. The application and subsequent concession are governed by the provisions of Part XVA of the Customs Act 1901, which outlines the process for making TCOs and the criteria that must be satisfied by the Chief Executive Officer of Customs (CEO). The instrument was made on 7 April 2006, and it came into force on the date the application was lodged, 18 January 2006. The TCO does not retroactively affect the rights of any person other than the Commonwealth and does not impose liabilities on anyone for actions taken before its registration. Instead, it provides benefits to importers by allowing them to apply for duty refunds on goods imported since the effective date of the TCO. The geographic reach of this legislation is national, as it applies to customs duties across Australia, and it does not specify any exclusions or exemptions other than those outlined in section 269SJ of the Act.
Key Provisions
The main operative sections of the Customs Act 1901, particularly section 269C, establish the criteria for Tariff Concession Orders (TCOs). According to section 269C, a TCO application will be considered if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. This condition is pivotal for the tariff concession to apply. If the Chief Executive Officer of Customs (CEO) determines that the application meets these criteria, they must issue a written order specifying the goods to which the concession applies (section 269P(3)). The specific TCO in question, Instrument TCO No. 0602558, pertains to certain colour television receivers, reducing their duty from 5% to 0%.
The obligations imposed by the Act on the parties or entities it governs primarily involve the application process and the CEO’s decision-making role. For applicants like Hagemeyer Appliances, the obligation is to submit a valid application, ensuring that it complies with the criteria outlined in section 269C. The CEO must then assess whether the application meets these criteria and, if satisfied, make a written TCO. Furthermore, section 269K(1) mandates the CEO to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. The CEO must consider these submissions before making a final decision.
The Act also includes provisions for offences, penalties, or civil/criminal consequences for breach. While the Act does not explicitly state maximum penalties for non-compliance with TCOs, general penalties for breaches of the Customs Act can include fines and imprisonment. For example, section 217 of the Customs Act imposes a penalty of up to five years imprisonment or a fine of up to 5,000 penalty units for serious offences. These penalties underscore the importance of adhering to the legislative requirements and the CEO’s decisions regarding TCOs. Failure to comply with the Act or with a TCO could result in significant legal repercussions, including the possibility of civil or criminal proceedings.