EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0808275
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.
Switched On Innovations Pty Ltd applied for a TCO in respect of certain led luminaire systems on 15 May 2008.
Instrument
TCO No 0808575 was made on 08 August 2008. It declares that those certain led luminaire systems 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. 0808275 is taken to have come into force on 15 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 Customs Act 1901, enacted by the Australian Parliament, includes provisions for Tariff Concession Orders (TCOs) under Part XVA, which allow the Chief Executive Officer of Customs (CEO) to apply lower rates of customs duty on certain goods. The Tariff Concession Instrument No. 0808275, introduced on 8 August 2008, addresses the need for tariff concessions by providing relief on certain LED luminaire systems. The policy objective, as outlined in the explanatory statement, is to facilitate the import of goods for which no substitutable Australian-made alternatives exist, thereby supporting the market and potentially encouraging innovation or import diversity. This specific TCO, applied to Switched On Innovations Pty Ltd's LED luminaire systems, effectively reduces the duty from the general rate of 5% to free, in line with item 50 of Schedule 4 of the Customs Tariff Act 1995. The process involved publishing a notice in the Gazette to invite submissions, which did not receive any objections, and the TCO came into force on the date of application, 15 May 2008.
Scope and Application
The Tariff Concession Instrument No. 0808275, made under the Customs Act 1901, applies to certain LED luminaire systems and their importation into Australia. This legislation allows for the reduction of customs duty on these specific goods, provided that no substitutable goods are produced in Australia. The application of this Instrument is triggered by an application made to the Chief Executive Officer of Customs, who must then assess whether the application meets the core criteria set out in the Act. Specifically, the CEO must determine if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The geographic reach of this legislation is national, affecting all importers of the specified goods within Australia. The application does not extend to goods specified in section 269SJ of the Customs Act 1901, which are ineligible for tariff concessions. The Instrument, once made, applies retroactively to the date the application was lodged, meaning it does not disadvantage any existing rights or impose liabilities for actions taken prior to its registration. The rights of importers are beneficially affected, allowing them to apply for a refund of duties on imports since the deemed commencement date of the Instrument.
Key Provisions
The Customs Act 1901, as amended, allows for the creation of Tariff Concession Orders (TCO) through Part XVA, which is designed to provide relief on customs duties for certain goods. Section 269F (1) of the Act allows for an application to be made by a person to the Chief Executive Officer (CEO) of Customs for a TCO concerning specific goods. The CEO is required to assess if the application complies with the core criteria outlined in section 269C of the Act, which stipulates that no substitutable goods should be produced in Australia in the ordinary course of business on the day the application was lodged. For the purposes of this assessment, section 269B defines the terms 'goods produced in Australia', 'ordinary course of business' and 'substitutable goods'. If the CEO determines that the application meets the core criteria, they are mandated to issue a written order, which is the TCO, specifying the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, as per subsection 269P(3).
Entities and individuals must adhere to the requirements outlined in the Customs Act 1901 when applying for a TCO. The CEO must ensure that the application is not for goods listed in section 269SJ, which are ineligible for a TCO. The CEO must also publish a notice in the Gazette, inviting any interested party to submit any reasons why the TCO should not be granted, as stipulated in subsection 269K(1). Once the application is accepted as valid, and if no submissions are received, the CEO must proceed to make the TCO. The TCO has the effect of applying a lower rate of duty on the specified goods, in this case, a free rate instead of the general 5% duty rate for certain LED luminaire systems.
Failure to comply with the requirements set forth in the Customs Act 1901 can result in civil or criminal penalties. However, the explanatory statement does not provide explicit details on the specific offences, penalties, or consequences for non-compliance. It is important for applicants and the CEO to ensure all requirements are met to avoid potential repercussions. The TCO itself does not affect the rights of any person other than the Commonwealth, nor does it impose any liabilities on any person in respect of anything done or omitted to be done before the date of registration. The rights of importers, however, are beneficially affected, as they can apply for a refund of duty on goods imported since the TCO came into force, under paragraph 126(1)(r) of the Regulations.