EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0613081
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.
Arri Australia applied for a TCO in respect of certain lights on 4 August 2006.
Instrument
TCO No 0613081 was made on 19 April 2007. It declares that those certain lights 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. One submission objecting to the TCO application was received from Tridonic Atco Australia Pty Ltd.
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. 0613081 is taken to have come into force on 4 August 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. 0613081 was enacted in 2007 under the Customs Act 1901 to address the specific needs of importers regarding the tariff rates on certain goods, in this case, certain lights. The Customs Act 1901, enacted by the Commonwealth Parliament, establishes a framework for the regulation of customs and excise, including the imposition of duties on imported goods. This particular instrument was introduced to provide tariff concessions, effectively reducing the customs duty on specified goods from the general rate to zero, thereby addressing the issue of potentially high import costs for these goods. The policy objective is to support importers by lowering the tariff burden on specific goods, facilitating more competitive pricing in the market and potentially boosting local demand for these products.
The instrument was initiated by an application from Arri Australia on 4 August 2006, seeking a tariff concession order (TCO) for certain lights. After thorough consideration, including a public consultation period where objections were considered, the Chief Executive Officer of Customs determined that the application met the core criteria stipulated in the Customs Act 1901. Consequently, Tariff Concession Instrument No. 0613081 was registered on 19 April 2007, declaring that the certain lights are subject to a zero percent duty rate, which contrasts with the general rate of 5 percent. This decision was made on the basis that no substitutable goods were produced in Australia, aligning with the legislative requirements for tariff concessions.
Scope and Application
The Tariff Concession Instrument No. 0613081 under the Customs Act 1901 applies to individuals and entities that import goods specified in the instrument, particularly focusing on certain lights which now benefit from a reduced customs duty rate as a result of this order. The instrument targets the importation of these specific goods, providing a concessional rate of duty, and is designed to benefit importers by reducing the financial burden associated with importing these goods. The scope of this legislation is national, as it operates under the Commonwealth's authority, impacting importers across Australia. However, the Act excludes goods specified in section 269SJ of the Customs Act 1901, which cannot be subject to a Tariff Concession Order. Additionally, the CEO must ensure that the application for a TCO meets core criteria, including the absence of substitutable goods produced in Australia, before proceeding with the order. The commencement date of this Tariff Concession Order is 4 August 2006, the day the application was lodged, and it does not retroactively affect any duties or liabilities incurred before this date.
Key Provisions
The main sections of the Customs Act 1901 pertinent to Tariff Concession Orders (TCOs) include section 269F, which allows for an application to be made to the Chief Executive Officer (CEO) of Customs for a TCO, and section 269C, which sets out the core criteria for the CEO to consider when deciding whether to approve such an application. According to section 269C, a TCO application will meet the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. The CEO is required to publish a notice in the Gazette inviting submissions if there are objections to the application, as per section 269K(1). If satisfied that the application meets the criteria, the CEO must issue a written order, as stated in section 269P(3).
The Act imposes certain obligations on both the applicant and the CEO. The applicant must ensure their application meets the core criteria outlined in section 269C, which includes demonstrating that no substitutable goods were produced in Australia on the application date. The CEO must review the application and, if satisfied, issue a TCO. Additionally, the CEO is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested party to lodge a submission if they believe there are reasons why the TCO should not be made.
Under the Customs Act 1901, there are no specific offences, penalties, or civil/criminal consequences mentioned in relation to the breach of the provisions concerning TCOs. However, the legislation ensures 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 (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. Importers of goods subject to a TCO may benefit from being able to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force, as per paragraph 126(1)(r) of the Regulations.