EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0604262
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.
Lifestyle Brilliance Australia Pty Ltd applied for a TCO in respect of certain airconditioners on 23 February 2006.
Instrument
TCO No 0604262 was made on 28 April 2006. It declares that those certain airconditioners 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. 0604262 is taken to have come into force on 23 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 Customs Act 1901 was enacted to regulate the importation of goods into Australia, providing mechanisms to assess and collect duties and taxes on those goods. It establishes the framework within which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs), which lower the customs duty on specific goods if certain conditions are met. This legislative instrument aims to address the issue of ensuring that Australian industries are not unfairly disadvantaged by the importation of cheaper goods that could be produced domestically, by providing a pathway for duty relief on imported goods that do not have Australian-made equivalents. The Tariff Concession Instrument No. 0604262, made under the authority of the Customs Act 1901, was introduced to provide a zero per cent duty rate on certain airconditioners imported by Lifestyle Brilliance Australia Pty Ltd, reflecting the policy objective of encouraging the importation of goods that are not produced in Australia, thus supporting market competition and consumer choice.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) which apply lower rates of customs duty to specified goods. This mechanism is available to any individual or entity seeking to reduce the duty on imported goods, provided the application does not pertain to goods specified in section 269SJ, which cannot be subject to a TCO. The CEO evaluates whether an application meets the core criteria, which requires that on the date of application, no substitutable goods are produced in Australia in the ordinary course of business. If these criteria are satisfied, the CEO issues a TCO, effective from the date the application was lodged. In the case of Lifestyle Brilliance Australia Pty Ltd, a TCO was made for certain airconditioners, reducing their duty from 5% to 0%. The CEO is also required to publish a notice in the Gazette inviting objections to the TCO, although no submissions were received for this particular TCO. The TCO does not affect existing rights or impose liabilities for actions prior to its registration, though it does enable importers to seek refunds for duty paid on goods since the TCO's effective date. The Act's application extends across the Commonwealth, with the scope of TCOs being further defined and potentially expanded through subordinate instruments.
Key Provisions
The primary operative sections of this legislation are sections 269C, 269P(3), and 269S(1) of the Customs Act 1901. Section 269C (1) stipulates that a Tariff Concession Order (TCO) application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they must make a written order (a TCO) declaring that the goods in question are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995. Section 269S(1) provides that a TCO is considered to have come into force on the day the application for the TCO was lodged.
The obligations and requirements imposed by the Customs Act 1901 on the parties governed by this legislation include the necessity for the CEO of Customs to ensure that any application for a TCO is valid and meets the core criteria as outlined in section 269C. This involves confirming that no substitutable goods are produced in Australia on the day the application was lodged. The CEO must also publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. In this case, no submissions were received, allowing the TCO to proceed. The Act also requires that the rights of persons, other than the Commonwealth, are not adversely affected by the TCO, and it specifies that the rights of importers will be beneficially affected.
In terms of consequences for breach, the Customs Act 1901 does not explicitly detail offences, penalties, or civil/criminal consequences for failure to comply with the provisions regarding TCOs. However, any breach of the Customs Act, including non-compliance with the conditions set out for TCOs, may result in enforcement actions under other sections of the Act. These actions could include fines and other penalties as prescribed by the Act, and could potentially lead to civil or criminal proceedings depending on the nature and severity of the breach. The exact penalties would depend on the specific breach and relevant provisions of the Customs Act.