EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0705486
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.
Bose Pty Ltd applied for a TCO in respect of certain tv speaker extension sets on 16 April 2007.
Instrument
TCO No 0705486 was made on 29 June 2007. It declares that those certain tv speaker extension sets 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. 0705486 is taken to have come into force on 16 April 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 Parliament of Australia, addresses the need for a streamlined process to facilitate the import of goods that meet specific criteria for tariff concessions. This Act establishes a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). The explanatory statement for Instrument No. 0705486, made under this Act, indicates that Bose Pty Ltd applied for a TCO for certain TV speaker extension sets on 16 April 2007. After assessing the application and finding that no substitutable goods were produced in Australia, the CEO issued TCO No. 0705486 on 29 June 2007, which effectively reduced the duty rate from 5% to 0% for these goods. The instrument came into force on the date of the application, 16 April 2007, without imposing any liabilities on persons other than the Commonwealth, thereby benefiting importers by allowing them to apply for a refund of duty paid on the goods since the effective date of the TCO.
Scope and Application
The Customs Act 1901, through its Part XVA, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders provide for a lower rate of customs duty on specified goods. The Act applies to individuals and entities that apply for a TCO in respect of goods, and the CEO who is responsible for deciding whether an application meets the core criteria. The core criteria include ensuring that no substitutable goods are produced in Australia on the day the application was lodged. The TCOs have a national reach, as they are governed by Commonwealth law. The exclusions are specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The CEO is required to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made, though no submissions were received for TCO No 0705486. The application for a TCO, and thus the commencement of the order, is deemed to occur on the date the application is lodged. This particular TCO, which took effect from 16 April 2007, benefits importers by allowing them to apply for a refund of duty on goods imported since the effective date.
Key Provisions
The main operative sections of this legislation relate to the process for making Tariff Concession Orders (TCOs) and the specific TCO made in respect of certain TV speaker extension sets. Section 269F of the Customs Act 1901 allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO is satisfied that the application meets the core criteria, they must make a written order (a TCO) declaring that the goods are to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. In this case, TCO No. 0705486 was made on 29 June 2007 and declares that certain TV speaker extension sets are goods to which item 50 of Schedule 4 to the Tariff applies, reducing the duty from 5% to 0%.
The obligations imposed on the parties by the Customs Act 1901 and this TCO include the requirement for the CEO to assess whether an application for a TCO meets the core criteria, which is defined in section 269C. The CEO must also ensure that the application is not in respect of goods specified in section 269SJ, which sets out those goods that cannot be subject to a TCO. The CEO must also publish a notice in the Gazette inviting submissions on the application as soon as practicable after accepting it as a valid application (subsection 269K(1)). Additionally, importers of the goods subject to the TCO have the right to apply for a refund of duty on goods imported since the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations).
The legislation does not explicitly state any offences, penalties, or civil/criminal consequences for breach. However, non-compliance with the terms of the TCO or the Customs Act 1901 could potentially lead to legal action by the Commonwealth or the CEO. For example, if a person were to falsely claim that goods were subject to a TCO in order to avoid paying customs duty, they could potentially be charged with fraud or customs duty evasion, which carry significant penalties under Australian law. Similarly, if the CEO were to make a TCO in respect of goods that did not meet the core criteria, they could potentially be held liable for any resulting losses or damages.