EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0844244
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.
Tee-Zed Products Pty Ltd applied for a TCO in respect of certain night lights on 17 December 2008.
Instrument
TCO No 0844244 was made on 06 March 2009. It declares that those certain night 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. 0844244 is taken to have come into force on 17 December 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. 0844244 was enacted in 2009 to address a specific need within the framework of the Customs Act 1901. This legislation was introduced to provide relief on customs duties for certain goods through the mechanism of Tariff Concession Orders (TCOs). The Customs Act 1901, specifically Part XVA, outlines the process by which the Chief Executive Officer of Customs can make such orders, applying lower customs duty rates to goods that meet certain criteria. The purpose of this instrument is to ensure that goods for which there are no substitutable Australian-made alternatives can benefit from tariff concessions, thereby promoting economic efficiency and supporting industries that rely on imported components or materials.
The instrument was developed following an application by Tee-Zed Products Pty Ltd for a TCO concerning certain night lights. The CEO of Customs was satisfied that no substitutable goods were produced in Australia, meeting the core criteria stipulated in section 269C of the Act. Consequently, TCO No. 0844244 was issued, effective from 17 December 2008, the date the application was lodged. This order exempts the specified night lights from the general 5% customs duty rate, granting them a duty-free status. The instrument was made without any submissions opposing it, indicating broad acceptance of the tariff concession's rationale.
Scope and Application
The Customs Act 1901, as amended, allows for the implementation of Tariff Concession Orders (TCOs) through which lower rates of customs duty can be applied to specific goods. The application of these orders is primarily managed by the Chief Executive Officer of Customs, who evaluates applications to ensure they meet the core criteria, specifically that no substitutable goods are produced in Australia in the ordinary course of business. This evaluation process ensures that the concession is applied appropriately to goods that are not locally produced, thereby encouraging the importation of necessary goods. The scope of the Act applies to any person or entity seeking to import goods that qualify for a tariff concession, with the primary geographic reach being the national level under the Commonwealth of Australia. The Act does not impose any liabilities on individuals or entities other than the Commonwealth, and it does not disadvantage existing rights as of the date of registration. Instead, it provides a benefit to importers by potentially allowing them to claim a refund of duty on goods imported from the date the TCO is deemed to come into force.
Key Provisions
The Tariff Concession Instrument No. 0844244, as outlined in the Customs Act 1901, pertains to a concession on customs duty for certain night lights, as applied by Tee-Zed Products Pty Ltd. According to section 269P(3) (2), if the Chief Executive Officer (CEO) of Customs is satisfied that an application for a Tariff Concession Order (TCO) meets the core criteria, the CEO must issue a written order specifying that the goods in question are subject to a particular item in Schedule 4 of the Customs Tariff Act 1995. For the specified night lights, this order declares that they are subject to item 50 of that schedule, effectively granting them a tariff concession that reduces the duty from the general rate of 5% to free.
Under the Customs Act 1901, entities must adhere to specific obligations when dealing with TCOs. For example, section 269C (3) mandates that the CEO must assess whether an application for a TCO meets the core criteria, which includes verifying that no substitutable goods are being produced in Australia. In the case of Tee-Zed Products, the CEO determined that no such substitutable goods existed, thus permitting the issuance of TCO No. 0844244. Additionally, section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any interested parties who might oppose the TCO. Although no submissions were received in response to the notice for this particular TCO, the process ensures transparency and public participation in the decision-making process.
The Act also outlines potential consequences for breaches of its provisions. However, the Explanatory Statement does not specify any particular offences, penalties, or consequences for non-compliance with the TCO requirements. Generally, under the Customs Act 1901, breaches of the Act's provisions can lead to both civil and criminal penalties. Civil penalties might include financial penalties and the seizure of goods, while criminal penalties could involve fines and imprisonment, depending on the severity and intent of the breach. Although the specific maximum penalties are not detailed in the Explanatory Statement, they are typically stipulated in other sections of the Customs Act 1901 or related regulations.