EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0806480
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.
Space Cannon Australia Pty Ltd applied for a TCO in respect of certain led light modulars on 05 May 2008.
Instrument
TCO No 0806480 was made on 01 August 2008. It declares that those certain led light modulars 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. 0806480 is taken to have come into force on 05 May 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. 0806480 was enacted under the Customs Act 1901 to address the need for concessional tariffs on certain imported goods, specifically LED light modulars, to ensure they are competitively priced and accessible in the Australian market. This legislation was introduced to facilitate applications for Tariff Concession Orders (TCOs) from entities such as Space Cannon Australia Pty Ltd, ensuring that such applications are processed efficiently by the Chief Executive Officer of Customs (CEO) and that the concessions are granted without unnecessary delays. The instrument was made on August 1, 2008, following a successful application on May 5, 2008, where it was determined that no substitutable goods were produced in Australia, meeting the core criteria as outlined in the Act. The policy objective was to provide tariff relief for specific goods, thus supporting domestic market competitiveness and consumer access to affordable products.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the Chief Executive Officer (CEO) of Customs to make Tariff Concession Orders (TCOs) that apply reduced rates of customs duty on certain goods. This Act applies to any person or entity seeking to import specific goods that meet the criteria for a tariff concession. The scope of this legislation extends nationally as it is a Commonwealth Act, thereby affecting all states and territories within Australia. The application process involves the CEO evaluating whether the goods in question are not produced in Australia and whether they meet the specified criteria for substitutability. Notably, goods listed in section 269SJ of the Act, which includes certain restricted items, are ineligible for a TCO. The CEO’s decision to grant a TCO is contingent on the absence of domestically produced substitutable goods, as defined by sections 269C, 269D, and 269E of the Act. Subordinate instruments may further refine or extend the application of this Act, ensuring that the concessions are applied accurately and consistently.
Key Provisions
The Customs Act 1901 (section 269F) enables the Chief Executive Officer of Customs (CEO) to make Tariff Concession Orders (TCO) for goods specified in an application, provided these goods are not listed in section 269SJ. If an application is made and the CEO determines that it does not pertain to prohibited goods, the application must then meet the core criteria set out in section 269C. This requires the CEO to confirm that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The definitions for "goods produced in Australia," "ordinary course of business," and "substitutable goods" are detailed in sections 269D, 269E, and 269P respectively. If the CEO is satisfied that the application meets these criteria, a TCO must be issued as per section 269P(3).
In fulfilling their duties under the Customs Act, the CEO must ensure compliance with several key obligations. Upon receiving an application for a TCO, the CEO is required to publish a notice in the Gazette (subsection 269K(1)) and invite submissions from any interested parties who might oppose the TCO. In the case of Tariff Concession Order No. 0806480, the CEO did not receive any opposing submissions. Additionally, the CEO must ensure that the TCO does not disadvantage any person, other than the Commonwealth, in relation to actions or omissions before the registration date (subsection 269S(1)). This means that the TCO, which came into force on 5 May 2008, does not affect any pre-existing rights or impose liabilities on any person other than the Commonwealth.
Failure to comply with the requirements and obligations under the Customs Act may result in various penalties and consequences. The Act does not specify the exact penalties for breaches; however, it is known that breaches can lead to both civil and criminal consequences. Civil penalties could include fines or financial penalties as determined by a court. Criminal penalties might involve imprisonment, depending on the severity of the breach and the discretion of the court. These penalties underscore the importance of adhering to the provisions of the Customs Act and the obligations imposed on the CEO and other parties involved in the TCO process.