EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0711701
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.
Toshiba (Australia) Pty Ltd applied for a TCO in respect of certain colour television parts on 19 July 2007.
Instrument
TCO No 0711701 was made on 21 September 2007. It declares that those certain colour television parts 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. 0711701 is taken to have come into force on 19 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 Australian Parliament, establishes a framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs). These orders are designed to provide relief from customs duty for certain goods under specific conditions, such as when no substitutable goods are produced in Australia. The Tariff Concession Instrument No. 0711701, issued under this Act, aims to address the need for tariff concessions for particular colour television parts by Toshiba (Australia) Pty Ltd. The CEO of Customs determined that no substitutable goods were produced in Australia, thereby satisfying the core criteria for a TCO. As a result, the instrument was enacted to grant free customs duty on these specific goods, effective from the date of the application, 19 July 2007, while ensuring that the rights of importers are positively impacted and no new liabilities are imposed on any person.
Scope and Application
The Customs Act 1901, through Part XVA, allows for the creation of Tariff Concession Orders (TCOs) which provide for a lower rate of customs duty on specified goods. These orders are made by the Chief Executive Officer of Customs and apply to goods for which an application has been submitted and approved, provided they are not among the goods specified in section 269SJ of the Act as ineligible for such concessions. For an application to be considered, it must meet the core criteria outlined in section 269C of the Act, specifically that no substitutable goods are produced in Australia at the time of the application. The application process includes a requirement for the CEO to publish a notice in the Gazette inviting submissions from interested parties, although no submissions were received in relation to TCO No. 0711701. The TCO applies from the date the application was lodged, meaning that any rights of importers are beneficially affected from that date, allowing for duty refunds for goods imported since then, without imposing any liabilities on any person. This TCO specifically exempts certain colour television parts from the general rate of duty, setting it at free instead of the usual 5%.
Key Provisions
The key provisions of this legislation pertain to the creation of Tariff Concession Orders (TCOs) under the Customs Act 1901. Specifically, section 269F allows an individual to apply to the Chief Executive Officer of Customs (CEO) for a TCO on certain goods, provided the goods are not specified in section 269SJ. The CEO must then determine whether the application meets the core criteria outlined in section 269C, which requires that on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The definitions of 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269B respectively. If the CEO is satisfied that the application meets the core criteria, they must make a written order (the TCO), declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (Tariff) as specified in the order (section 269P(3)).
The Act imposes specific obligations on the CEO in processing a TCO application. Upon accepting a valid TCO application, the CEO must publish a notice in the Gazette, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission (subsection 269K(1)). This was done for the application in question, but no submissions were received. The TCO itself is deemed to have come into force on the day the application was lodged (subsection 269S(1)), as is the case for TCO No. 0711701 which was lodged on 19 July 2007.
Under the Act, the TCO does 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 anything done or omitted before the registration date. However, the rights of importers are beneficially affected, and they can apply for a refund of duty on goods imported since the TCO came into force under paragraph 126(1)(r) of the Regulations. There are no penalties or consequences outlined in this specific legislation for breach, but general provisions under the Customs Act 1901 would apply for non-compliance with customs-related laws.