EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0839147
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.
Lincoln Sentry Pty Ltd applied for a TCO in respect of certain led lights and light fittings on 10 November 2008.
Instrument
TCO No 0839147 was made on 06 February 2009. It declares that those certain led lights and light fittings 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. 0839147 is taken to have come into force on 10 November 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. 0839147 was enacted in 2009 under the Customs Act 1901 to address the specific needs of businesses importing certain goods, in this case, LED lights and light fittings, by providing them with tariff concessions. This instrument was introduced to facilitate smoother trade operations by reducing the customs duty on these goods, thus making them more affordable for importers and potentially boosting their competitiveness in the Australian market. The instrument was created in response to an application by Lincoln Sentry Pty Ltd, and following consultation as required by the Act, no objections were received. The instrument came into effect on the date the application was lodged, ensuring a timely benefit to the applicant.
The instrument was enacted by the Chief Executive Officer of Customs, who was satisfied that the application met the core criteria as stipulated in the Customs Act 1901, namely, that no substitutable goods were produced in Australia at the time of the application. This concession aligns with the broader policy objective of the Customs Act 1901 to streamline trade processes and support economic efficiency by reducing unnecessary tariffs on imported goods. The instrument does not disadvantage any person other than the Commonwealth and imposes no new liabilities, ensuring that the rights and obligations of all parties are clearly maintained.
Scope and Application
The Tariff Concession Instrument No. 0839147 under the Customs Act 1901 applies to the importation of certain LED lights and light fittings, providing a concession on the customs duty applicable to these goods. The Act applies to any person who applies for a Tariff Concession Order (TCO) on behalf of goods that are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The instrument was made by the Chief Executive Officer of Customs (CEO) upon determining that the application met the core criteria, specifically that no substitutable goods were produced in Australia in the ordinary course of business at the time of the application. This concession benefits importers by setting the duty rate at free, whereas the general rate is 5%. The application of the TCO is effective from the date the application was lodged, 10 November 2008, and does not affect the rights of any person other than the Commonwealth, nor does it impose any new liabilities on persons. The CEO published a notice in the Gazette inviting submissions against the TCO, though none were received.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0839147 under the Customs Act 1901 (the Act) focus on the establishment of Tariff Concession Orders (TCOs) (sections 269C, 269F, and 269P). Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods, provided the goods do not fall under the exclusions specified in section 269SJ. If the CEO is satisfied that the application meets the core criteria outlined in section 269C, they must make a written order declaring the goods subject to a specified rate of customs duty, as detailed in Schedule 4 of the Customs Tariff Act 1995. This instrument specifically applies to certain LED lights and light fittings, granting them a free rate of duty (item 50 of Schedule 4), effective from the date the application was lodged, 10 November 2008.
The Act imposes several obligations and requirements on the parties involved. Firstly, the CEO must ensure that the application for a TCO does not pertain to goods excluded under section 269SJ. If the application is valid, the CEO must verify that no substitutable goods are produced in Australia on the day the application is lodged, as per section 269C. Additionally, section 269K(1) requires the CEO to publish a notice in the Gazette, inviting submissions from any interested parties on the proposed TCO. For this particular TCO, no submissions were received, indicating a lack of opposition to the concession. Finally, section 269S(1) specifies that the TCO is to be taken as coming into force on the date the application was lodged, with no retroactive effect on pre-existing rights or liabilities.
Breaching the obligations or requirements set out in the Act can lead to various consequences. Under section 269F, if an application is made in respect of goods that are excluded under section 269SJ, the CEO is not obligated to process the application. Additionally, if the CEO fails to publish a notice in the Gazette as required by section 269K(1), they may face legal repercussions. While the explanatory statement does not specify exact penalties for these breaches, it is important to note that failure to comply with the Act's requirements can result in legal action. The maximum penalties for breaches of customs regulations, which may encompass the provisions of this TCO, can include fines of up to $22,000 or imprisonment for up to two years, as outlined in the Crimes Act 1914. These penalties underscore the importance of adhering to the statutory requirements and obligations set out in the Customs Act 1901.