EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701072
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 batteries on 19 January 2007.
Instrument
TCO No 0701072 was made on 13 April 2007. It declares that those certain mobile phone batteries 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. 0701072 is taken to have come into force on 19 January 2007.
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 Commonwealth Parliament, establishes a framework under which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs). These orders are intended to provide relief on customs duties for certain goods, under specific conditions, where no substitutable goods are produced in Australia. The Tariff Concession Instrument No. 0701072, enacted in 2007, addresses the gap in tariff concessions for particular mobile phone batteries. The objective is to ensure that these goods benefit from a lower rate of customs duty when imported, provided that no suitable substitute is manufactured domestically. The instrument was made following an application by E 2 Go Australia Pty Ltd, and no objections were raised during the public consultation period, leading to the issuance of the concession.
Scope and Application
The Tariff Concession Instrument No. 0701072 under the Customs Act 1901 applies to entities and individuals seeking tariff concessions for specific goods, in this case, certain mobile phone batteries. The Act mandates that the Chief Executive Officer of Customs (CEO) must consider applications for Tariff Concession Orders (TCOs) and make decisions based on whether the goods in question meet the core criteria, including the absence of substitutable goods produced in Australia in the ordinary course of business. The instrument applies to the Commonwealth jurisdiction and its effect extends to the general reduction of customs duty on the specified goods from the date the application was lodged, which in this instance was 19 January 2007. This legislation does not affect the rights of any person in relation to actions taken before the TCO's effective date, and no submissions were received in response to the CEO's invitation for objections. Additionally, the TCO does not impose any liabilities on any person, including importers who can apply for refunds of duty on goods imported since the TCO's effective date.
Key Provisions
The Tariff Concession Instrument No. 0701072, made under section 269F of the Customs Act 1901, outlines the process for granting a Tariff Concession Order (TCO) to reduce customs duty on specific goods. If an applicant, such as E 2 Go Australia Pty Ltd, submits an application for a TCO (section 269F), the Chief Executive Officer of Customs (CEO) must first determine if the goods specified in the application fall under the restricted category outlined in section 269SJ. If not, the CEO evaluates whether the application meets the core criteria set forth in section 269C. This criterion primarily requires that, on the date of application, no substitutable goods are being produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act.
Upon satisfying themselves that the core criteria are met, the CEO must issue a written TCO (section 269P(3)). This order declares that the specified goods will be subject to a lower customs duty rate as outlined in Schedule 4 to the Customs Tariff Act 1995. In the case of TCO No. 0701072, certain mobile phone batteries are subject to a duty rate of free, whereas the general rate is 5%. The CEO is also required to publish a notice in the Gazette (section 269K(1)), inviting any interested parties to lodge submissions against the TCO. However, in this instance, no submissions were received.
The obligations under this legislation include the CEO’s duty to assess TCO applications against the specified criteria, publish notices in the Gazette, and issue written TCOs where appropriate. Importers of the goods affected by a TCO benefit from the reduced duty rates and can apply for refunds of any duties already paid since the TCO came into effect (Regulation 126(1)(r)). Importantly, the TCO does not retroactively affect the rights or impose liabilities on any person other than the Commonwealth.
Failure to comply with the provisions of the Customs Act 1901, including the correct application and implementation of TCOs, can result in legal consequences. While the explanatory statement does not detail specific offences or penalties, breaches of customs laws generally can lead to civil or criminal penalties, including fines and imprisonment. The exact penalties depend on the nature and severity of the breach, as outlined in relevant sections of the Customs Act and other applicable legislation.