EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0615702
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.
Quality IT Electronics Pty Ltd applied for a TCO in respect of certain radios on 03 November 2006.
Instrument
TCO No 0615702 was made on 19 January 2007. It declares that those certain radios 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. 0615702 is taken to have come into force on 03 November 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 manage the importation of goods into Australia and includes provisions for Tariff Concession Orders (TCOs) under Part XVA. These orders allow for reduced customs duty rates on specified goods, provided certain criteria are met. Enacted by the Australian Parliament, the Act aims to facilitate trade by reducing the financial burden on importers of goods that are not produced domestically. The Tariff Concession Instrument No. 0615702 was introduced to provide relief to specific goods, such as certain radios, by applying a zero duty rate instead of the general 5% rate, as no substitutable goods were being produced in Australia. The application for this concession was made by Quality IT Electronics Pty Ltd on 3 November 2006, and after satisfying the core criteria, the Chief Executive Officer of Customs issued the concession on 19 January 2007. The policy objective is to support Australian importers by lowering the cost of imported goods, thereby promoting trade and economic activity.
Scope and Application
The Customs Act 1901, specifically Part XVA, governs the process for Tariff Concession Orders (TCO) which provide lower rates of customs duty on certain goods. This scheme is facilitated by the Chief Executive Officer of Customs (CEO) who evaluates applications for TCOs. An application for a TCO is subject to stringent criteria, including the absence of substitutable goods produced in Australia at the time of application. The Act prohibits TCOs for goods specified in section 269SJ, and requires the CEO to ensure the application meets the core criteria under section 269C. Once approved, the CEO issues a TCO, which is effective from the date of application submission. This process ensures that the rights of importers are protected, allowing them to claim duty refunds on imports made since the effective date of the TCO. The geographic scope of this legislation is national, impacting all entities involved in the importation of goods subject to TCOs across Australia. Any application for a TCO must be published in the Gazette, inviting public submissions, although in the case of TCO No. 0615702, no submissions were received. This TCO applies specifically to certain radios, reducing their duty from 5% to free, and does not impose any liabilities on persons other than the Commonwealth.
Key Provisions
The main operative sections of this legislation, specifically sections 269F, 269C, and 269P, provide a framework for the application and approval of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the CEO is satisfied that the application does not pertain to goods specified in section 269SJ, which lists goods that cannot be subject to a TCO, the CEO must then determine whether the application meets the core criteria set out in section 269C. This criterion requires that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If these conditions are met, the CEO must make a written order under section 269P(3), declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, thereby applying a specific rate of duty.
The Act imposes certain obligations and requirements on the parties involved. The CEO must, as soon as practicable after accepting a TCO application as valid, publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO (subsection 269K(1)). If no submissions are received, the CEO is required to proceed with the application. The TCO is deemed to come into force on the day the application was lodged (subsection 269S(1)). Moreover, the rights of importers will be beneficially affected, as they can apply for a refund of duty on goods imported since the TCO is taken to have come into force under paragraph 126(1)(r) of the Regulations. Importantly, 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 legislation does not explicitly state any specific offences, penalties, or civil/criminal consequences for breach. However, the obligations imposed on the CEO, such as publishing a notice in the Gazette and considering submissions, are integral to ensuring the process is transparent and fair. Non-compliance with these obligations could lead to legal challenges or administrative penalties, though these are not detailed in the provided text. The focus remains on ensuring that the TCO process adheres to the statutory requirements and does not impose unfair disadvantages or liabilities on any party.