EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0800902
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.
Krix Loudspeakers Pty Ltd applied for a TCO in respect of certain loudspeakers on 15 January 2008.
Instrument
TCO No 0800902 was made on 25 March 2008. It declares that those certain loudspeakers 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. 0800902 is taken to have come into force on 15 January 2008.
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. 0800902, enacted in 2008, is a legislative instrument under the Customs Act 1901, designed to facilitate tariff concessions for specific goods. This instrument was introduced to address the need for a streamlined process through which businesses could apply for tariff reductions on goods that are not produced domestically and have no substitutable goods available in Australia. The instrument empowers the Chief Executive Officer of Customs to grant these concessions if certain criteria are met, thus providing a mechanism to support Australian importers by reducing the duty on imported goods, thereby making them more competitive in the market. This was achieved without disadvantaging existing rights holders or imposing new liabilities on any party, as clarified in the explanatory statement.
The instrument was enacted by the relevant federal authority under the Customs Act 1901, with the primary policy objective of enhancing trade efficiency and supporting Australian businesses by lowering the cost of imported goods through tariff concessions. The process involves an application by the interested party, followed by a decision by the CEO of Customs based on whether the application meets the stipulated criteria, ensuring that only goods without Australian substitutes benefit from the tariff reduction.
Scope and Application
The Tariff Concession Instrument No. 0800902, made under the Customs Act 1901, applies to the specific goods identified in the instrument, namely certain loudspeakers produced by Krix Loudspeakers Pty Ltd, which have been granted a tariff concession order (TCO). The TCO is applicable to these goods, providing a zero rate of duty, whereas the general rate of duty for such goods is 5%. The application of the TCO is contingent on the Chief Executive Officer of Customs being satisfied that no substitutable goods are produced in Australia, in line with the core criteria set out in section 269C of the Act. The instrument’s jurisdictional reach is national, as it pertains to the application of customs duties at the federal level. Importantly, the TCO does not affect the rights of any person, other than the Commonwealth, as of the date of registration and does not impose any liabilities on any person. The instrument came into effect on 15 January 2008, the date the application was lodged, and does not extend or restrict its application through subordinate instruments.
Key Provisions
The Tariff Concession Instrument No. 0800902, under the Customs Act 1901, facilitates tariff concessions for specific goods, as detailed in section 269F. In this instance, the instrument applies to certain loudspeakers, and was issued following an application by Krix Loudspeakers Pty Ltd on 15 January 2008. The instrument, which came into force on the same day as the application was lodged, specifies that the general duty rate of 5% is reduced to free for the specified goods, as outlined in item 50 of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). The Chief Executive Officer of Customs (CEO) made the decision based on the absence of substitutable goods produced in Australia, meeting the core criteria set out in section 269C.
The Act imposes several obligations on the parties involved. The CEO must determine whether an application for a tariff concession order (TCO) meets the core criteria and, if satisfied, must make a written TCO order. Furthermore, the CEO is required to publish a notice in the Gazette inviting submissions from interested parties once a TCO application is accepted as valid (subsection 269K(1)). In this case, no submissions were received in response to the notice. Additionally, the Act ensures that the TCO does not disadvantage any person or impose liabilities for actions taken prior to the TCO's registration (subsection 269S(1)).
Under the Customs Act 1901, various offences and penalties are associated with breaches of the Act's provisions. For instance, unauthorised importation of goods or fraudulent behaviour in relation to customs duties can lead to substantial fines and imprisonment. Although the specific instrument focuses on tariff concessions, the broader Customs Act provides for both civil and criminal penalties. The maximum penalties for serious offences may include fines up to $220,000 or imprisonment for up to 10 years, or both, reflecting the seriousness with which breaches of the Act are treated. The specifics of penalties would depend on the nature and severity of the breach as outlined in the broader Customs Act provisions.