EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0827293
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.
Spectrum Lighting applied for a TCO in respect of certain bay lights on 20 August 2008.
Instrument
TCO No 0827293 was made on 14 November 2008. It declares that those certain bay lights 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. 0827293 is taken to have come into force on 20 August 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, establishes a framework for the regulation of customs and excise, including the imposition of duties and taxes on imported goods. To address the need for flexibility and responsiveness in tariff regulation, Part XVA of the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. The primary objective of this legislative instrument is to provide relief from customs duties on certain goods where it is determined that there are no substitutable goods produced in Australia. This mechanism helps to support Australian industries by ensuring that imported goods do not unfairly compete with domestic production. The Tariff Concession Instrument No. 0827293, made under this framework, exemplifies the process by which specific goods, such as certain bay lights, can be granted a tariff concession, effectively reducing their customs duty rate to zero and thereby supporting the competitive position of Australian manufacturers.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which can apply lower customs duty rates to specific goods. The act applies to individuals and entities who apply for a TCO and to goods that meet the criteria outlined in the Act, ensuring that the goods are not substitutable by locally produced goods and do not fall under the exclusions listed in section 269SJ. Geographically, the act operates under the Commonwealth jurisdiction, extending its reach across Australia. The application of the act is not restricted by state or territory boundaries but is subject to the conditions stipulated within the Customs Act 1901 and its subordinate instruments. The application process involves a public notice inviting submissions, though in cases such as TCO No. 0827293, no objections were received. The TCOs do not affect the rights of any person as at the date of registration and do not impose liabilities on anyone, but they do provide benefits to importers by potentially allowing them to apply for a refund of duty on goods imported since the TCO came into force.
Key Provisions
The primary operative sections of this legislation are sections 269C, 269P, and 269S of the Customs Act 1901. Section 269C outlines the core criteria for an application for a Tariff Concession Order (TCO), which must be met for the Chief Executive Officer (CEO) of Customs to consider the application. Specifically, on the day the application is lodged, no substitutable goods can be produced in Australia in the ordinary course of business. Section 269P(3) mandates that if the CEO is satisfied that the application meets these core criteria, a written order must be made declaring that the goods specified in the application are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. Section 269S(1) stipulates that a TCO is considered to have come into force on the day the application for the TCO was lodged.
The obligations imposed on the parties by this Act are primarily on the CEO of Customs. Once a valid application for a TCO is received, the CEO must publish a notice in the Gazette, inviting any person who considers there are reasons why the TCO should not be made to lodge a submission with the CEO. Additionally, the CEO must assess whether the application meets the core criteria specified in section 269C and decide whether to make a TCO. There are no obligations imposed on other entities or individuals by this legislation, other than the requirement to respond if they believe there are grounds for the TCO not to be made.
The Act does not explicitly state offences or penalties for breaches. However, failure to comply with the requirements to publish a notice in the Gazette or to assess applications properly could potentially lead to legal challenges or administrative actions. There are no specific maximum penalties mentioned in the Act for breaches of the TCO provisions. Instead, any legal consequences would likely arise from the broader administrative and judicial processes applicable to the Customs Act 1901 and related legislation.