EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0711516
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.
Arlec Australia Pty Ltd applied for a TCO in respect of certain work lights on 17 July 2007.
Instrument
TCO No 0711516 was made on 21 September 2007. It declares that those certain work lights 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. 0711516 is taken to have come into force on 17 July 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, introduced a scheme under which Tariff Concession Orders (TCOs) could be made to provide tariff concessions on certain imported goods. This was done to address the problem of ensuring that Australian businesses could access necessary goods without being unduly burdened by high customs duties, particularly when no suitable domestic alternatives existed. The explanatory statement for Tariff Concession Instrument No. 0711516, enacted on 21 September 2007, illustrates this process by detailing how a TCO was applied to certain work lights, reducing the duty rate from 5% to 0%. This legislative framework ensures that the Chief Executive Officer of Customs evaluates applications based on core criteria, such as the absence of substitutable goods produced in Australia, and allows for public consultation before making a decision, thereby balancing the needs of importers and the broader economic policy objectives.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders apply to goods specified in the TCO and provide for a reduced rate of customs duty. Any person may apply to the CEO for a TCO concerning goods, provided that the goods are not those listed in section 269SJ of the Act, which are ineligible for such concessions. For an application to meet the core criteria, it must be demonstrated that, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business. This definition of 'substitutable goods' is given in section 269D of the Act, which refers to goods produced in Australia that can serve the same use as the goods in question. The CEO must issue a written TCO if satisfied that the application meets these criteria. This process was exemplified in TCO No. 0711516, where certain work lights were subject to a concession, reducing their duty rate from 5% to 0%.
The application of TCOs is not limited geographically, extending across the Commonwealth as governed by the Customs Act 1901. Any person, including businesses or importers, can apply for a TCO, and the application process requires public notification, allowing for submissions from interested parties. However, the rights of persons other than the Commonwealth are protected, ensuring that the TCO does not disadvantage or impose liabilities for actions taken prior to the TCO's effective date. The TCO in question, effective from the date of application, specifically benefits importers by allowing them to apply for duty refunds on goods imported since the concession's effective date.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0711516, under the Customs Act 1901, pertain to the establishment of a tariff concession order (TCO) for specific work lights. Section 269F (1) allows an individual or entity to apply to the Chief Executive Officer of Customs (CEO) for a TCO. Once the CEO is satisfied that the application is not in respect of goods prohibited under section 269SJ and meets the core criteria outlined in section 269C, they must make a written TCO order. Section 269P(3) mandates that if the CEO is convinced the application meets these criteria, they must declare that the specified goods are subject to a prescribed tariff item.
The Act imposes several obligations on the parties involved. Firstly, under section 269K(1), the CEO must publish a notice in the Gazette after accepting the TCO application as valid, inviting submissions from any person who believes the TCO should not be made. In this instance, no submissions were received. Additionally, the Act requires that the TCO not affect the rights of any person (other than the Commonwealth) as at the date of registration in a way that disadvantages them or imposes liabilities for actions taken prior to the registration date. The TCO ensures that the rights of importers are beneficially affected and can apply for a refund of duty on goods imported since the TCO came into force, as per Regulation 126(1)(r).
In terms of consequences for breach, the explanatory statement does not explicitly mention any specific offences or penalties for failing to comply with the TCO provisions. However, non-compliance with the Customs Act 1901 can result in various civil or criminal consequences depending on the nature and severity of the breach. Penalties can include fines and imprisonment, as outlined in the relevant sections of the Customs Act and other applicable laws. The maximum penalties for breaches under the Customs Act can vary significantly based on the specific offence committed.