EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802018
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.
Energizer Australia Pty Ltd applied for a TCO in respect of certain reading lamps on 5 February 2008.
Instrument
TCO No 0802018 was made on 11 April 2008. It declares that those certain reading lamps 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. 0802018 is taken to have come into force on 5 February 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 Customs Act 1901 was enacted by the Parliament of Australia to provide for the regulation of customs and excise, including the imposition of customs duty. One of the mechanisms introduced under this Act to address tariff concessions is through Tariff Concession Orders (TCOs), which can be made by the Chief Executive Officer of Customs. The problem or gap targeted by this legislative framework is the potential economic disadvantage faced by importers of goods that are not produced domestically and for which there are no substitutable goods available in Australia. The policy objective is to facilitate the importation of goods that are not produced locally, thereby supporting trade and potentially lowering costs for consumers and businesses.
In the specific instance of TCO No. 0802018, made on 11 April 2008, the Chief Executive Officer of Customs granted a concession for certain reading lamps, reducing the duty from the general rate of 5% to free. This decision was based on the determination that no substitutable goods were produced in Australia at the time of the application, aligning with the criteria set out in the Customs Act 1901. The instrument became effective on the date of the application, 5 February 2008, and provides benefits to importers by potentially allowing them to claim refunds for duties paid on imports since that date.
Scope and Application
The Tariff Concession Instrument No. 0802018 applies to entities or individuals seeking tariff concessions on imported goods under the Customs Act 1901, specifically in relation to certain reading lamps that were the subject of an application by Energizer Australia Pty Ltd. This Act facilitates the granting of tariff concessions by the Chief Executive Officer of Customs, whereby certain goods may be subject to a lower rate of customs duty if the application meets the core criteria outlined in the legislation. The instrument is effective from the date the application was lodged, which was 5 February 2008, and the concessions apply nationally as per the provisions of the Customs Act. The application process involves a public notification in the Gazette, inviting objections, although none were received in this instance. The TCO does not retroactively affect the rights of any person or impose liabilities for actions taken prior to the instrument's effective date. Instead, it primarily benefits importers by potentially allowing them to apply for duty refunds on goods imported since the commencement date of the tariff concession.
Key Provisions
The main operative sections of this legislation revolve around Tariff Concession Orders (TCOs) under the Customs Act 1901 (section 269F). An application for a TCO can be submitted to the Chief Executive Officer of Customs (CEO) if the goods in question are not specified in section 269SJ of the Act (section 269C). If the CEO is satisfied that the application meets the core criteria, including the absence of substitutable goods produced in Australia, a TCO is issued (section 269P(3)). In this instance, Energizer Australia Pty Ltd applied for a TCO for certain reading lamps on 5 February 2008. The CEO subsequently made TCO No. 0802018 on 11 April 2008, declaring that these reading lamps are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with the rate of duty reduced from 5% to free.
The Act imposes several obligations on the parties involved. The CEO must assess whether the application for a TCO meets the core criteria, specifically whether there are any substitutable goods produced in Australia (section 269C). If satisfied, the CEO must make a written order as a TCO. The CEO is also required to publish a notice in the Gazette inviting any interested parties to submit objections to the TCO (subsection 269K(1)). In this case, no submissions were received. The TCO is effective from the date of application submission (subsection 269S(1)), meaning the tariff concession for the reading lamps became effective on 5 February 2008. Importers can apply for a refund of duty on goods imported since the TCO came into force under paragraph 126(1)(r) of the Regulations.
The Customs Act 1901 does not explicitly outline offences, penalties, or consequences for breaches related to TCOs. However, general provisions of the Act and associated regulations may apply for non-compliance with customs duties and other related obligations. The CEO has the authority to enforce compliance, and any significant breaches could potentially lead to legal actions under the broader customs laws, with penalties including fines and other civil or criminal sanctions as prescribed by the relevant legislation.
In summary, TCO No. 0802018 reduces the duty on certain reading lamps to free, effective from 5 February 2008. The CEO's role includes evaluating applications against the core criteria and publishing notices for objections. Importers may seek duty refunds for goods imported since the effective date. While specific penalties for TCO breaches are not detailed, general customs laws and regulations would apply for non-compliance.