EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0902827
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.
Conexus applied for a TCO in respect of certain loudspeaker on 28 January 2009.
Instrument
TCO No 0902827 was made on 24 April 2009. It declares that those certain loudspeaker 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. 0902827 is taken to have come into force on 28 January 2009.
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. 0902827 was enacted under the Customs Act 1901 to address the need for a streamlined process to reduce customs duties on certain goods that meet specific criteria, thus fostering trade and economic efficiency. The instrument was introduced to allow the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) for goods that do not have substitutable equivalents produced in Australia. The purpose of this legislation is to ensure that the application of tariff concessions does not negatively impact domestic production, while also providing relief to importers by reducing the duty rates on specific goods.
The instrument was enacted by the Australian Government, with the objective of facilitating trade by providing tariff concessions on certain goods, in this case, specific loudspeakers, which benefit importers by reducing their duty costs. The Tariff Concession Order No. 0902827 was made on 24 April 2009, and it is effective from the date the application was lodged, 28 January 2009. Importantly, the TCO does not disadvantage any person or impose liabilities on anyone in respect of actions taken before its registration. Instead, it provides a benefit to importers by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO.
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) to apply reduced rates of customs duty on specified goods. This legislation enables individuals or entities to apply for tariff concessions if the goods in question are not specified in section 269SJ of the Act, which excludes certain goods from this scheme. For an application to be considered, it must meet the core criteria outlined in section 269C, which requires that no substitutable goods are produced in Australia at the time of application. If the CEO determines that these criteria are met, a written TCO is issued, effectively applying a prescribed tariff from Schedule 4 of the Customs Tariff Act 1995 to the specified goods. The application process also involves publishing a notice in the Gazette, inviting submissions from interested parties, although in the case of TCO No. 0902827, no submissions were received. The TCO takes effect from the date the application was lodged, and it does not disadvantage any person or impose new liabilities but allows importers to seek refunds on duties paid before the concession was registered.
Key Provisions
The main operative sections of this legislation pertain to Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F (1) allows for an application to be made to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the CEO is satisfied that the application meets the core criteria outlined in section 269C, the CEO must make a written order declaring that the goods are to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (section 269P(3)). Section 269K(1) mandates that the CEO must publish a notice in the Gazette inviting submissions from any person who considers that there are reasons why the TCO should not be made, although no such submissions were received in this case.
The obligations and requirements imposed by the Act on the parties involved are primarily centred around the application process for TCOs. An applicant must ensure that the goods they seek to have included in a TCO meet the criteria set out in the Act, specifically that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). The CEO is required to assess whether the application meets these criteria and, if satisfied, to make a TCO within the specified timeframe. Furthermore, the CEO must publish a notice in the Gazette inviting submissions on the application, although this notice did not elicit any submissions in the case of TCO No. 0902827.
Under the Customs Act 1901, breaches of the requirements set out for the issuance of TCOs may result in civil or criminal consequences. While the explanatory statement does not specify offences directly related to TCO applications, the Act does provide for penalties for breaches of customs-related laws. For instance, section 178 of the Customs Act 1901 imposes penalties for fraudulent importation and other customs offences, which could apply if there is any misrepresentation or non-compliance in the application process for TCOs. The maximum penalties for these offences can include substantial fines and imprisonment, depending on the severity and intent of the breach. The Customs Tariff Act 1995 and related regulations also outline specific penalties for non-compliance with tariff and duty provisions, although these are not detailed in the explanatory statement.