EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619719
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.
E 2 Go Australia Pty Ltd applied for a TCO in respect of certain mobile phone battery adaptors on 14 December 2006.
Instrument
TCO No 0619719 was made on 09 March 2007. It declares that those certain mobile phone battery adaptors 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. 0619719 is taken to have come into force on 14 December 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, facilitates the imposition of tariff concession orders (TCOs) which reduce the rate of customs duty on specific goods. This legislative framework aims to address the economic barriers faced by businesses seeking to import certain goods that are not produced locally, thereby encouraging competition and supporting market efficiency. The Tariff Concession Instrument No. 0619719, made under the authority of the Customs Act, provides a practical application of this framework. In this instance, E 2 Go Australia Pty Ltd successfully applied for a TCO for certain mobile phone battery adaptors, resulting in the goods being subject to a zero duty rate. The policy objective is to ensure that importers are not disadvantaged and to potentially provide them with refunds for duties paid prior to the TCO’s effective date.
Scope and Application
The Tariff Concession Instrument No. 0619719 under the Customs Act 1901 applies to specific goods, namely certain mobile phone battery adaptors, as determined by the Chief Executive Officer of Customs (CEO). This legislation is pertinent to entities or individuals involved in the importation of these adaptors. The primary aim of the instrument is to provide tariff concessions for these goods by applying a lower rate of customs duty, which is free of charge instead of the general rate of 5%. This concession applies to the import of the specified goods and benefits those who import them by potentially entitling them to a refund of duty paid on imports since the date the concession took effect. The instrument’s application is confined to the goods specified in the order and does not extend to any other goods or activities. The instrument's scope is limited to the Commonwealth jurisdiction, and it does not impact the rights of any person other than the Commonwealth, nor does it impose any new liabilities on individuals or entities. The instrument came into effect on the date the application was lodged, 14 December 2006, and does not affect any actions taken prior to this date.
Key Provisions
Section 269F of the Customs Act 1901 allows an application to be made to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) concerning specific goods. If the CEO determines that the application does not pertain to goods specified in section 269SJ, which lists goods ineligible for a TCO, they must assess whether the application meets the core criteria. Section 269C stipulates that an application meets these criteria if, on the day of its submission, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F of the Act respectively. If the CEO is satisfied that the application meets the core criteria, they must issue a written order (TCO) under section 269P(3), declaring the goods to which a specified item in Schedule 4 to the Customs Tariff Act 1995 applies.
Entities and individuals governed by the Act must ensure their applications for a TCO are thoroughly prepared and compliant with the core criteria. They must provide all necessary information to substantiate that no substitutable goods are produced in Australia in the ordinary course of business. Upon receiving an application, the CEO is mandated to publish a notice in the Gazette under subsection 269K(1), inviting any interested parties to submit objections if they believe the TCO should not be granted. The CEO is required to consider these submissions before making a final decision. Additionally, the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration, ensuring that no one is disadvantaged or imposed with liabilities for actions taken before the TCO's registration date.
Failure to comply with the requirements set out in the Customs Act 1901 and the associated regulations could lead to various legal consequences. While specific offences and penalties are not detailed within this explanatory statement, breaches of customs laws generally can result in substantial fines and, in severe cases, criminal charges. The penalties can include financial sanctions and potential imprisonment, depending on the severity and intent of the breach. For instance, fraudulent activities or significant misrepresentation in TCO applications might lead to more severe penalties. It is essential for all parties involved to adhere strictly to the provisions of the Act to avoid any adverse legal repercussions.