EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0805922
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.
The Trustee For Arlec Unit Trust applied for a TCO in respect of certain floodlights on 30 April 2008.
Instrument
TCO No 0805922 was made on 18 July 2008. It declares that those certain floodlights 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. 0805922 is taken to have come into force on 30 April 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, enacted by the Commonwealth Parliament, established a framework for the application of customs duty on imported goods. Part XVA of the Act introduces a scheme under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs to lower the duty on specific goods. This scheme was introduced to address the need for flexibility in the application of customs duty, particularly in cases where no Australian-made alternatives exist. The policy objective behind this provision is to encourage trade by reducing the cost of imported goods that are not produced domestically, thereby making them more competitive in the market. The Explanatory Statement for Tariff Concession Instrument No. 0805922, issued on 18 July 2008, details the application and approval process for a TCO related to certain floodlights, which were granted a duty-free status as no substitutable goods were produced in Australia at the time of application.
Scope and Application
The Tariff Concession Instrument No. 0805922 under the Customs Act 1901 applies specifically to the concession of customs duties on certain floodlights. This Act pertains to the application and approval process for Tariff Concession Orders (TCOs), which are made by the Chief Executive Officer of Customs. The legislation is designed to provide a lower rate of customs duty on goods that are the subject of a TCO, provided that the goods are not specified in section 269SJ of the Act and the application meets the core criteria outlined in section 269C. The core criteria require that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The geographic reach of this Act is national, as it operates under the Commonwealth of Australia. The application process requires public notice and invites submissions from any person who may have an interest in opposing the concession, as stipulated in subsection 269K(1) of the Act. The TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on individuals or entities, ensuring that existing rights are preserved. The TCO in question became effective on 30 April 2008, the date on which the application was lodged, and benefits importers by allowing them to apply for a refund of duty on goods imported since that date.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0805922 under the Customs Act 1901 (sections 269C, 269F, 269P) pertain to the process and requirements for making Tariff Concession Orders (TCOs). Under section 269F, a person can apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of certain goods. If the CEO is satisfied that the application meets the core criteria set out in section 269C, which includes the absence of substitutable goods produced in Australia in the ordinary course of business, the CEO must issue a written order declaring that the goods in question are subject to a specified item in Schedule 4 of the Customs Tariff Act 1995. For the Trustee for Arlec Unit Trust, this instrument (No. 0805922) declared that certain floodlights would be subject to item 50 of Schedule 4, with a duty rate of free instead of the general rate of 5%.
The Act imposes several obligations and requirements on the parties involved. Firstly, the CEO must ensure that the TCO application does not pertain to goods specified in section 269SJ, which are ineligible for TCOs. If the application passes this initial check, the CEO must assess whether the application meets the core criteria outlined in section 269C. This includes verifying that no substitutable goods are produced in Australia. Additionally, as per section 269K, the CEO is required to publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not proceed. In this case, no submissions were received.
Breaching the conditions or requirements set forth in the Customs Act 1901 can result in both civil and criminal consequences. While the explanatory statement does not explicitly outline the penalties for non-compliance, under Australian law, penalties for breaches of customs regulations can include fines and, in severe cases, imprisonment. The specific penalties would depend on the nature and severity of the breach. Moreover, any failure to adhere to the terms of a TCO could also lead to the revocation of the concession, potentially resulting in the re-imposition of the original duty rates.
The Trustee for Arlec Unit Trust, having applied for and received a TCO, is now entitled to the benefits of the tariff concession, which means that the floodlights in question will be subject to a duty rate of free. This concession is effective from the date the application was lodged, 30 April 2008, as stipulated by section 269S(1) of the Act. Importantly, this TCO does not retroactively affect the rights of any person other than the Commonwealth and does not impose any new liabilities on any person. Importers of the affected goods can also apply for a refund of duty on goods imported since the effective date of the TCO, as per paragraph 126(1)(r) of the Regulations.