EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0837500
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.
National Audio Systems Pty Ltd applied for a TCO in respect of certain audio frequency amplifiers on 29 October 2008.
Instrument
TCO No 0837500 was made on 23 January 2009. It declares that those certain audio frequency amplifiers 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. 0837500 is taken to have come into force on 29 October 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. 0837500, enacted in 2009, is a measure under the Customs Act 1901 designed to provide relief on customs duties for certain imported goods. This instrument was introduced to address the need for tariff concessions in cases where no equivalent goods are produced in Australia, thereby ensuring that Australian consumers and businesses have access to competitively priced imported goods. The instrument was developed by the Chief Executive Officer of Customs (CEO) in response to an application from National Audio Systems Pty Ltd for a tariff concession on certain audio frequency amplifiers. The policy objective, as outlined in the Customs Act 1901, is to provide duty-free treatment for these goods, thereby reducing the cost of imported items that have no Australian-made alternatives. The instrument was registered on 23 January 2009 and is effective from 29 October 2008, the date the application was lodged. Importantly, the introduction of this tariff concession does not affect any pre-existing rights or impose new liabilities on any person, except for potentially benefiting importers who can claim refunds for duties paid on these goods since the effective date.
Scope and Application
The Customs Act 1901, specifically through Part XVA, facilitates the application of tariff concession orders (TCOs) for particular goods, thereby allowing for reduced customs duties on those goods. This process is overseen by the Chief Executive Officer of Customs (CEO), who evaluates applications to ensure they meet the core criteria stipulated in section 269C of the Act. Such criteria include the absence of substitutable goods produced in Australia, as defined by sections 269D and 269E. Once the CEO is satisfied that an application meets these criteria, they issue a TCO, as seen in the case of Tariff Concession Order No. 0837500 for certain audio frequency amplifiers, which were granted a zero rate of duty as of 29 October 2008. The scope of the Act extends nationally, impacting importers who can benefit from the reduced duty rates and potential refunds on duties paid before the TCO's effective date. Notably, the Act does not disadvantage existing rights or impose new liabilities on individuals or entities other than the Commonwealth.
Key Provisions
The Customs Act 1901, as amended, includes a scheme for Tariff Concession Orders (TCOs) under Part XVA, which allows for lower rates of customs duty on specific goods (ss 269C, 269F, 269K, 269S). A TCO may be applied for by any person in respect of goods, provided the goods are not specified in section 269SJ (s 269F). If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, a TCO must be made (s 269C, 269P(3)). In this instance, TCO No. 0837500, made on 23 January 2009, applies to certain audio frequency amplifiers, granting them a free rate of duty instead of the general rate of 5% (item 50, Schedule 4, Customs Tariff Act 1995).
The Act imposes several obligations on the parties involved. Upon receiving an application for a TCO, the CEO must determine whether the application meets the core criteria, which includes confirming that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged (s 269C). If the criteria are met, the CEO must make a written order specifying the goods to which the prescribed tariff item applies (s 269P(3)). Additionally, the CEO is required to publish a notice in the Gazette inviting submissions on the proposed TCO and must consider any submissions received (s 269K(1)). For TCO No. 0837500, no submissions were received.
In terms of civil and criminal consequences, the Act does not explicitly outline penalties for breaches of TCO provisions. However, any improper application or fraudulent claims related to TCOs could potentially be subject to general penalties under the Customs Act, including fines and imprisonment for serious offences. The Act also ensures that the TCO does not affect the rights of any person other than the Commonwealth in respect of anything done or omitted before the TCO's registration date (s 269S(1)). Importers of the affected goods can apply for a refund of duty paid on imports since the effective date of the TCO (Reg 126(1)(r)).