EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0615604
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.
Australian Discount Retail (Trading) Pty Ltd applied for a TCO in respect of certain colour television receivers on 10 October 2006.
Instrument
TCO No 0615604 was made on 15 December 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. 0615604 is taken to have come into force on 10 October 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, provides a framework for the regulation of customs and excise duties. In 2006, an amendment was introduced to address the need for tariff concessions that could lower customs duties on specific goods, thereby supporting Australian businesses in remaining competitive within their markets. Tariff Concession Instrument No. 0615604 was developed under Part XVA of the Act, allowing the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs). The policy objective is to facilitate economic efficiency and competitiveness by reducing the duty on goods for which no substitutable Australian-made alternatives exist. Australian Discount Retail (Trading) Pty Ltd successfully applied for a TCO on certain colour television receivers, resulting in a duty reduction from 5% to 0%, effective from 10 October 2006.
Scope and Application
The Tariff Concession Instrument No. 0615604, pursuant to the Customs Act 1901, applies to entities or individuals who have applied for and been granted a Tariff Concession Order (TCO) for specific goods, in this case, certain colour television receivers. The instrument was made to facilitate tariff concessions for these goods, reducing the customs duty from 5% to 0%. The Act applies to entities that can demonstrate that no substitutable goods are produced in Australia in the ordinary course of business, thereby meeting the core criteria stipulated under the Act. The instrument is part of a broader scheme under which the CEO of Customs can make TCOs, providing lower rates of customs duty for specified goods. The application of the TCO does not affect the rights of persons (other than the Commonwealth) as at the date of registration, ensuring that no existing rights are disadvantaged or new liabilities imposed.
Geographically, the application of this Tariff Concession Instrument is within the Commonwealth of Australia, as it operates under the Customs Act 1901, which is a federal statute. The instrument's scope is limited to the specific goods mentioned and does not extend to other goods or industries unless similarly applied for and granted a TCO. The instrument does not specify any exclusions or exemptions beyond those detailed in section 269SJ of the Act, which excludes certain goods from being subject to a TCO. The Act allows for the extension and restriction of application through subordinate instruments, ensuring that the scheme remains flexible and responsive to changing economic and market conditions.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0615604, under the Customs Act 1901, involve the application and assessment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Section 269F outlines the process by which a person may apply to the CEO for a TCO in respect of certain goods, provided these goods are not specified in section 269SJ. Section 269C requires that the application meets core criteria, primarily that no substitutable goods were produced in Australia on the day the application was lodged, as defined by sections 269D and 269E. Upon meeting these criteria, the CEO must make a written order under section 269P(3), declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. This instrument, TCO No. 0615604, was made on 15 December 2006, declaring that certain colour television receivers are subject to a zero per cent duty rate, down from the general rate of 5%.
The obligations imposed by this Act on parties include the necessity for applicants to ensure their applications are valid and meet the core criteria set out in the Act. This involves demonstrating that the goods in question are not substitutable by any goods produced in Australia and that they do not fall within the restricted list in section 269SJ. The CEO is obligated to review the applications, consult where necessary, and make an order if the application meets the criteria. The CEO also has an obligation to publish a notice in the Gazette, inviting submissions from interested parties, as per subsection 269K(1). Additionally, the Act ensures that the rights of persons, other than the Commonwealth, are not adversely affected by the TCO.
There are no direct offences outlined in the Act, but non-compliance with the Act's requirements could potentially lead to civil or administrative consequences. For instance, if an applicant provides false information in their TCO application, they could face penalties under other sections of the Customs Act 1901, which could include fines or other penalties as prescribed by law. The Act does not specify maximum penalties for breaches directly related to TCO applications, but breaches of related customs regulations could incur penalties up to $11,100 for individuals and $55,500 for corporations, as per the applicable sections of the Customs Act 1901. The TCO itself does not impose any liabilities on any person other than the Commonwealth and ensures that importers of such goods can apply for a refund of duty on goods imported since the TCO came into force.