EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0711826
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.
HPM Industries Pty Ltd applied for a TCO in respect of certain digital timers on 23 July 2007.
Instrument
TCO No 0711826 was made on 02 October 2007. It declares that those certain digital timers 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. 0711826 is taken to have come into force on 23 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, provides a framework for the regulation of customs and excise in Australia. The Act aims to facilitate trade while ensuring the collection of appropriate revenue and the enforcement of regulatory measures. A significant aspect of this Act is the scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This scheme was introduced to address the need for flexibility in applying customs duties, particularly in cases where imported goods do not have substitutable Australian-made alternatives. This ensures that Australian consumers and businesses have access to a competitive range of products without being burdened by excessive tariffs on non-substitutable goods. The explanatory statement for Tariff Concession Instrument No. 0711826 details a specific instance where the CEO of Customs granted a TCO to HPM Industries Pty Ltd for certain digital timers, effectively reducing the duty on these goods from 5% to free, in line with the policy objectives of the Customs Act 1901.
Scope and Application
The Tariff Concession Instrument No. 0711826 under the Customs Act 1901 applies specifically to certain digital timers and the conditions under which they can receive a tariff concession order (TCO). The Act allows the Chief Executive Officer of Customs (CEO) to issue TCOs that provide a lower rate of customs duty on goods, provided the application meets the core criteria and the goods are not specified as ineligible under section 269SJ of the Act. In this case, HPM Industries Pty Ltd applied for the TCO on 23 July 2007, and the CEO was satisfied that the application met the criteria, leading to the issuance of TCO No. 0711826 on 2 October 2007. The instrument declares that the certain digital timers are subject to a free rate of duty instead of the general 5% rate, and it came into effect on the date of application, 23 July 2007. The rights of importers are beneficially affected, as they can apply for a refund of duty on goods imported since the TCO's effective date. This legislation does not disadvantage any person or impose liabilities on anyone in respect of actions taken before the registration date.
Key Provisions
The main operative sections of this legislation revolve around the creation and implementation of Tariff Concession Orders (TCOs) under the Customs Act 1901 (sections 269C, 269F, 269P, and 269S). Section 269F allows for applications to the Chief Executive Officer (CEO) of Customs for a TCO, provided that the goods in question are not specified in section 269SJ. If an application meets the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged, the CEO must make a written order (sections 269P(3) and 269S(1)). This particular instrument, TCO No. 0711826, declares that certain digital timers are subject to a reduced rate of customs duty, with the general rate being 5% and the TCO rate being free.
The obligations imposed by the Act on the parties involved primarily focus on the application and approval process for TCOs. The CEO must review each application to determine if it meets the core criteria (section 269C) and must make a written order if the criteria are satisfied (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (section 269K(1)). This particular TCO application process was followed, with no submissions received in response to the published notice.
The Act does not explicitly outline specific offences, penalties, or civil/criminal consequences for breach within the sections referenced here. However, it is implicit that failure to comply with the terms of a TCO or any other provision of the Customs Act 1901 could lead to legal ramifications, including potential fines or other penalties as prescribed by law. The Act ensures that the rights of importers will be beneficially affected, particularly in terms of being able to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force (Regulations, paragraph 126(1)(r)). Importantly, the TCO does not impose any liabilities on any person, including importers, in respect of actions taken before the date of registration.