EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0610960
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.
Philips Electronics Australia applied for a TCO in respect of certain electronic ballasts on 29 June 2006.
Instrument
TCO No 0610960 was made on 22 September 2006. It declares that those certain electronic ballasts 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. 0610960 is taken to have come into force on 29 June 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 Parliament of Australia, established a framework for the regulation of imports and exports, including the imposition of customs duties. A specific issue addressed by the Act is the application of tariff concession orders (TCOs) to certain goods, thereby providing a lower rate of customs duty. The Tariff Concession Instrument No. 0610960 was introduced on 22 September 2006, declaring that certain electronic ballasts are subject to a 5% duty rate as opposed to the general duty rate, which is free. This was made possible under section 269F of the Act, which allows for applications to the Chief Executive Officer of Customs for a TCO if certain criteria are met, specifically if no substitutable goods were produced in Australia on the day the application was lodged. The instrument came into effect on 29 June 2006, the date the application was lodged, and does not disadvantage any person other than the Commonwealth or impose any liabilities on any person.
Scope and Application
The Customs Act 1901, as amended, incorporates a mechanism through which Tariff Concession Orders (TCOs) can be issued, facilitating reduced customs duties on specified goods. This process is governed under Part XVA of the Act and involves the Chief Executive Officer of Customs (CEO) in determining eligibility for tariff concessions. The Act applies to individuals and entities seeking a tariff concession for goods that are not already produced in Australia in the ordinary course of business and which do not fall under the specific exclusions listed in section 269SJ. The geographic reach of this Act is national, as it operates within the framework of the Australian Commonwealth and affects all imports subject to the Customs Act. The Act may be extended or restricted through subordinate instruments, although the primary legislation itself outlines the core criteria and processes for tariff concession applications. Notably, the Act ensures that its application does not retroactively disadvantage any person or impose liabilities for actions taken prior to the concession's registration.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0610960 under the Customs Act 1901 (the Act) are sections 269C, 269F, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of goods. Section 269C specifies that a 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 CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order 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 applies. 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 obligations and requirements imposed by the Act on the parties or entities it governs include the obligation for the CEO to ensure that the TCO application meets the core criteria set out in section 269C of the Act. If the CEO is satisfied that the application meets these criteria, they must make a written order as specified in section 269P(3). The CEO must also publish a notice in the Gazette inviting submissions from any person who considers there are reasons why the TCO should not be made, as per subsection 269K(1) of the Act. The CEO is also required to ensure that 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 in respect of anything done or omitted to be done before the date of registration.
The Act also includes provisions for offences, penalties, or civil/criminal consequences for breach. While the explanatory statement does not specify the exact penalties for breaches, section 269S(1) of the Act provides that the TCO does not impose any liabilities on any person. Any breaches of the Act or the regulations would likely be subject to the general penalties provided under the Customs Act 1901, which can include substantial fines and imprisonment for serious offences. However, the specific penalties for breaches related to TCOs would depend on the nature and severity of the breach, and would be determined in accordance with the relevant provisions of the Act and any applicable regulations.