EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0703686
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.
Shriro Australia Pty Limited applied for a TCO in respect of certain MP3 player speakers on 08 March 2007.
Instrument
TCO No 0703686 was made on 25 May 2007. It declares that those certain MP3 player speakers 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. 0703686 is taken to have come into force on 08 March 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, as supplemented by the Tariff Concession Instrument No. 0703686 enacted in 2007, provides a mechanism for the Chief Executive Officer of Customs to grant tariff concessions on specific goods. This legislative instrument was introduced to address the need for a streamlined process to facilitate tariff reductions on goods where no substitutable products are produced domestically, thereby promoting competitive imports and potentially lowering consumer prices. The Parliament of Australia enacted this legislation to enhance the flexibility of the tariff system in response to applications from businesses, ensuring that the Australian market remains competitive without adversely affecting domestic production where none exists.
This instrument was created to provide clear criteria for the consideration and granting of tariff concessions, as outlined in Part XVA of the Customs Act. The policy objective is to ensure that tariff concessions are granted judiciously, taking into account the impact on both the domestic market and competitive imports. The Explanatory Statement clarifies that the process involves assessing whether substitutable goods are produced in Australia, and if not, applying a concessional rate of duty to the specified goods. The instrument, effective from the date the application was lodged, ensures that no existing rights or liabilities are adversely affected, while also allowing for potential duty refunds for importers.
Scope and Application
The Tariff Concession Instrument No. 0703686 under the Customs Act 1901 applies specifically to entities or individuals who have applied for tariff concession orders (TCOs) concerning particular goods, in this instance certain MP3 player speakers. This legislation is concerned with the application and implementation of TCOs, which are orders that reduce the rate of customs duty on specified goods. The Act applies to the Chief Executive Officer of Customs (CEO) who is responsible for making these orders and ensuring they meet the core criteria as outlined in the Act. The geographic reach of this legislation is national, as it pertains to the Commonwealth of Australia. The Act does not explicitly provide for exclusions, exemptions, or specific thresholds but rather focuses on the process and criteria for granting tariff concessions. The Act’s application can be further defined or extended through subordinate instruments, such as regulations, which may provide additional detail on the procedures and specific conditions for TCOs.
Key Provisions
The main operative sections of this legislation pertain to the process for granting Tariff Concession Orders (TCOs) under the Customs Act 1901 (section 269F). An application for a TCO can be made by any person to the Chief Executive Officer of Customs (CEO) (section 269F). The CEO must determine if the application is for goods that are not prohibited under section 269SJ and if it meets the core criteria specified in section 269C. If these conditions are met, the CEO is required to make a written order granting the concession (section 269P(3)). The specific TCO in question, TCO No. 0703686, pertains to certain MP3 player speakers and was declared effective from 8 March 2007, the date of the application.
The Customs Act 1901 imposes several obligations on the parties involved in the TCO process. The CEO must ensure that any TCO application is valid and not for prohibited goods (section 269SJ). The CEO also has to assess whether the application meets the core criteria, particularly that no substitutable goods were produced in Australia at the time of application (section 269C). Additionally, the CEO is mandated to publish a notice in the Gazette inviting submissions on the proposed TCO (subsection 269K(1)), although no submissions were received in this instance. Furthermore, the TCO does not affect any rights or impose any liabilities on persons other than the Commonwealth in respect of actions taken before the registration date (subsection 269S(4)).
The legislation outlines several potential consequences for non-compliance or breach of its provisions. Although specific penalties for breaches are not detailed in the provided text, general penalties for breaches of the Customs Act 1901 can include fines and imprisonment. The exact penalties would depend on the nature and severity of the breach, as well as any applicable provisions in the Customs Act 1901 or related regulations. Additionally, failure to adhere to the requirements for publishing notices and considering submissions could potentially lead to legal challenges regarding the validity of the TCO. However, no such breaches are indicated in this particular case.