EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0604026
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.
GPC Electronics Pty Ltd applied for a TCO in respect of certain telephone display gaskets on 20 February 2006.
Instrument
TCO No 0604026 was made on 28 April 2006. It declares that those certain telephone display gaskets 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 10%. 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. 0604026 is taken to have come into force on 20 February 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 Tariff Concession Instrument No. 0604026, enacted under the Customs Act 1901, was introduced to provide tariff concessions for certain telephone display gaskets imported into Australia, aiming to support specific sectors of the Australian economy. The instrument was established to address the gap in the duty rates for these goods, ensuring that they are subject to a lower rate of customs duty, thus promoting efficiency and competitiveness. This instrument was enacted by the Chief Executive Officer of Customs (CEO) after GPC Electronics Pty Ltd applied for the concession on 20 February 2006. The CEO determined that no substitutable goods were produced in Australia, thereby satisfying the core criteria for the concession. The policy objective, as outlined in the Act, is to facilitate the importation of goods that are not produced domestically, thereby reducing costs for businesses and consumers alike.
The instrument, effective from 20 February 2006, ensures that no person, other than the Commonwealth, is disadvantaged by the application of the concession. Importers of the specified gaskets will benefit from the zero per cent duty rate and can apply for refunds of duties paid on imports since the effective date. This legislative measure exemplifies the Australian government's commitment to creating a supportive trade environment by providing targeted tariff relief, thereby encouraging economic growth and efficiency within the industry.
Scope and Application
The Tariff Concession Instrument No. 0604026 under the Customs Act 1901 applies to specific goods, namely certain telephone display gaskets, and is aimed at entities or individuals involved in their importation. The instrument was enacted to provide a lower rate of customs duty on these goods, which is contingent upon the Chief Executive Officer of Customs determining that no substitutable goods were produced in Australia at the time the application was made. The Act applies to the entire Commonwealth of Australia, and its provisions are designed to ensure that the concession does not disadvantage any existing rights or impose new liabilities on any person other than the Commonwealth. The application of this instrument is also extended through subordinate instruments, as indicated by the regulations governing the refund of duty for importers of such goods. Notably, the instrument excludes goods specified under section 269SJ of the Customs Act 1901, which are ineligible for tariff concessions. The application for this particular concession was made by GPC Electronics Pty Ltd, and after the CEO's assessment, the instrument came into effect from the date of application, 20 February 2006.
Key Provisions
The Tariff Concession Instrument No. 0604026, issued under section 269F of the Customs Act 1901, establishes a Tariff Concession Order (TCO) for specific telephone display gaskets, setting their customs duty at 0% instead of the general rate of 10%. This concession applies to goods that are not substitutable by products manufactured in Australia and that meet the criteria outlined in section 269C, which requires the absence of any domestically produced equivalents on the date the TCO application was submitted. The TCO is deemed to come into force on the same day the application is lodged, in this case, 20 February 2006, as per subsection 269S(1) of the Act.
Entities subject to this TCO, such as GPC Electronics Pty Ltd, must ensure their compliance with the outlined conditions to benefit from the duty reduction. The obligations under this Act include the requirement for the Chief Executive Officer of Customs to publish a notice in the Gazette inviting submissions on the TCO application, although in this instance, no submissions were received. The TCO does not retroactively affect the rights of any parties, except to potentially allow for duty refunds under the Customs Act 1901 for imports made after the TCO's effective date.
Breach of the conditions specified in the TCO or misrepresentation of facts in the application could lead to civil or criminal consequences. While the explanatory statement does not specify penalties, the Customs Act 1901 generally provides for fines and imprisonment for offences related to customs duties. For example, under section 267 of the Act, a person who wilfully makes a false statement or representation in an entry or document required to be lodged with Customs may face a penalty of up to five years' imprisonment or a fine of up to 5,000 penalty units, or both. Additionally, section 270 of the Act outlines various other offences and penalties for breaches of customs regulations, which could apply if the concession conditions are not met or if fraudulent claims are made.