EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0839786
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.
Crest Electronics applied for a TCO in respect of certain flat panel indoor antenna on 13 November 2008.
Instrument
TCO No 0839786 was made on 30 January 2009. It declares that those certain flat panel indoor antenna 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. 0839786 is taken to have come into force on 13 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 Customs Act 1901, enacted by the Australian Parliament, establishes a framework for managing customs duties, including the provision for Tariff Concession Orders (TCOs). These orders, which can be applied for by individuals and approved by the Chief Executive Officer of Customs, allow for reduced customs duty rates on specific goods under certain conditions. The Tariff Concession Instrument No. 0839786, issued under this Act, was introduced to provide tariff concessions for certain flat panel indoor antennas, which were subject to a 5% general rate of duty. By the time the application was made on 13 November 2008, no substitutable goods were being produced in Australia, meeting the core criteria for a TCO. Consequently, the CEO of Customs issued Instrument TCO No. 0839786 on 30 January 2009, declaring that the specified goods would be subject to a free rate of duty, effective from the date of the application. This measure was intended to benefit importers by allowing them to apply for duty refunds on imports made since the TCO's effective date, without imposing any new liabilities on any parties.
Scope and Application
The Customs Act 1901, through its Part XVA, outlines the procedures for Tariff Concession Orders (TCOs) that may be issued by the Chief Executive Officer of Customs. These orders apply to specific goods, granting them a lower rate of customs duty than the general tariff. An application for a TCO can be made by any person, provided the goods in question are not listed in section 269SJ of the Act, which details goods ineligible for TCOs. The CEO is required to assess whether an application meets the core criteria, specifically if no substitutable goods were produced in Australia in the ordinary course of business. If the application satisfies these criteria, the CEO must issue a written order that declares the goods subject to a prescribed tariff item. The TCO process ensures that the rights of non-Commonwealth persons are not adversely affected by the order, although importers of the designated goods may benefit from refunds of duties paid prior to the order's effective date. The application of TCOs is regulated nationally, with the scope potentially extended or refined through subordinate instruments.
Key Provisions
The key provisions of the Tariff Concession Instrument No. 0839786 under the Customs Act 1901 (the Act) revolve around the granting of Tariff Concession Orders (TCOs). According to section 269F, an individual or entity may apply to the Chief Executive Officer of Customs (the CEO) for a TCO concerning specific goods. If the CEO determines that the application does not pertain to goods excluded by section 269SJ, the CEO must assess whether the application satisfies the core criteria set out in section 269C. This entails ensuring that, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets these criteria, they are required under section 269P(3) to issue a written order (the TCO), specifying that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff).
The obligations and requirements imposed by the Act on the parties involved are primarily centered around the application process for TCOs. The CEO must review the application to ensure it is valid and not related to excluded goods as per section 269SJ. If the application is deemed valid, the CEO must ascertain whether the core criteria are met by verifying that no substitutable goods were produced in Australia on the application date, as stipulated by section 269C. Upon meeting these criteria, the CEO is obligated to make a TCO, which is documented in writing and specifies the applicable tariff item from the Customs Tariff Act 1995. Furthermore, the CEO must publish a notice in the Gazette inviting submissions from interested parties, although no submissions were received for this particular TCO.
In terms of offences, penalties, or consequences, the Act does not explicitly outline specific criminal or civil penalties for non-compliance with the TCO process itself. However, the Act does provide that the rights of any person, other than the Commonwealth, will not be adversely affected by the TCO. This means that the TCO does not impose new liabilities or disadvantage anyone who had rights prior to the registration of the TCO. Additionally, importers of the goods subject to the TCO can apply for a refund of duties paid on those goods since the date the TCO is deemed to have come into force, as outlined in paragraph 126(1)(r) of the Regulations. The Act ensures that the TCO does not impose any liabilities on any person.