EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0715091
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.
Independence Studios Pty Ltd applied for a TCO in respect of certain mobile phone holders on 17 September 2007.
Instrument
TCO No 0715091 was made on 23 November 2007. It declares that those certain mobile phone holders 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. 0715091 is taken to have come into force on 17 September 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 Tariff Concession Instrument No. 0715091, made under the Customs Act 1901, addresses the issue of providing tariff concessions for specific goods, in this instance, mobile phone holders, where no substitutable goods are produced in Australia. Enacted by the Chief Executive Officer of Customs, the instrument aims to lower the rate of customs duty for the specified goods, thereby facilitating their importation and potentially benefiting importers through the ability to apply for refunds of duty paid on these goods since the date the Tariff Concession Order was taken to have come into force. The policy objective is to support industries by ensuring that goods which cannot be produced domestically are subject to reduced customs duty, thus maintaining competitiveness and encouraging import activities.
Scope and Application
The Tariff Concession Instrument No. 0715091, made under the Customs Act 1901, applies to the specific category of goods, namely certain mobile phone holders, and to the person who applied for the tariff concession, Independence Studios Pty Ltd. This instrument is part of a scheme under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs, aiming to provide lower rates of customs duty on specified goods. The application of this instrument is limited to goods that do not have substitutable alternatives produced in Australia and are not listed in section 269SJ of the Act, which excludes certain goods from TCO consideration. The instrument's geographic reach is aligned with the Commonwealth jurisdiction, impacting the importation of these goods into Australia. Exemptions or exclusions from this tariff concession are determined by the specific criteria set out in the Act, ensuring that the benefits are only extended to goods meeting the specified conditions. The scope of application may be further detailed or adjusted through subordinate instruments, which could specify additional conditions or clarify the interpretation of existing provisions.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0715091 under the Customs Act 1901 (section 269P(3)) detail the procedure and criteria for the Chief Executive Officer (CEO) of Customs to consider and make a Tariff Concession Order (TCO). Section 269C stipulates that a TCO application is eligible if, on the date of application, there are no substitutable goods produced in Australia in the ordinary course of business. This means that if the goods specified in the TCO application are not being produced domestically, the CEO must proceed with the application. Section 269F allows an individual or entity to apply to the CEO for a TCO, and section 269B further clarifies terms such as 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods'.
The obligations imposed by the Act on the parties involved are quite clear. The CEO must ensure that the application is valid and does not pertain to goods specified in section 269SJ, which are ineligible for TCOs. Upon determining that the application meets the core criteria, the CEO is mandated to issue a written TCO. The applicant, in this case, Independence Studios Pty Ltd, must provide sufficient evidence to demonstrate that no substitutable goods are produced in Australia, thereby satisfying the eligibility criteria for the concession. Additionally, the CEO is required to publish a notice in the Gazette (subsection 269K(1)) inviting submissions from interested parties regarding the TCO application, although in this instance, no submissions were received.
The legislation sets out specific consequences for non-compliance. Any breach of the conditions outlined in a TCO could potentially lead to civil or criminal penalties, depending on the severity and intent behind the breach. Although the explanatory statement does not specify the maximum penalties, it is implied that violations could result in financial penalties or legal action. The TCO itself does not impose any liabilities on individuals or entities, but failure to adhere to the terms of the concession could lead to the revocation of the concession and the imposition of standard customs duties on the goods in question.