EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0903693
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.
Lemec Environmental Services applied for a TCO in respect of certain fluorescent tube holders on 04 February 2009.
Instrument
TCO No 0903693 was made on 26 June 2009. It declares that those certain fluorescent tube holders 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. 0903693 is taken to have come into force on 04 February 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. 0903693 was enacted in 2009 as part of the Customs Act 1901, aiming to address the need for a scheme under which Tariff Concession Orders (TCOs) could be made to apply lower rates of customs duty on certain goods. This legislation was introduced to streamline the process for tariff concessions and was enacted by the Chief Executive Officer of Customs in response to an application from Lemec Environmental Services regarding certain fluorescent tube holders. The primary objective of the Act is to facilitate tariff reductions on goods that do not have substitutable Australian-made alternatives, thereby promoting competitiveness and potentially reducing costs for importers. The Act ensures that the implementation of TCOs does not negatively impact existing rights or impose liabilities on individuals or entities other than the Commonwealth.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0903693, applies to individuals and entities seeking tariff concessions for certain goods entering Australia. Specifically, this legislation is pertinent to those who wish to import goods that can benefit from reduced customs duty rates under the scheme for Tariff Concession Orders (TCOs). The instrument extends its application to any person or entity that lodges an application with the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided the application does not pertain to goods explicitly excluded by section 269SJ of the Act. The scope of the Act is geographically broad, applying across Australia as it is a Commonwealth Act, but its primary focus is on the customs duty implications for specific imported goods. The Act does not impose any liabilities or disadvantage any person other than the Commonwealth, ensuring that any rights as of the date of registration are preserved. Notably, the Act allows for the application of subordinate instruments to further detail the application and implementation of the TCOs, thereby extending its application and reach.
Key Provisions
The Customs Act 1901 establishes a framework under which the Chief Executive Officer of Customs (CEO) can issue Tariff Concession Orders (TCOs) that allow for reduced customs duty rates on specific goods (section 269F). Section 269C stipulates that a TCO application is eligible if no equivalent goods are produced in Australia in the ordinary course of business on the day the application is submitted. "Substitutable goods" are defined in section 269D as goods produced in Australia that can serve the same purpose as the goods in question. If the CEO is convinced that the application meets these criteria, they are required to issue a TCO, as outlined in section 269P(3).
Entities applying for a TCO, such as Lemec Environmental Services, must ensure that their applications are lodged in accordance with section 269F and that the goods specified do not have Australian equivalents as defined by section 269D. Once the CEO accepts the application as valid, they must publish a notice in the Gazette inviting objections (subsection 269K(1)). If no objections are lodged, the CEO proceeds to issue the TCO. In the case of TCO No. 0903693, no objections were received, and the CEO issued the order on 26 June 2009, declaring that the specified fluorescent tube holders would be subject to a zero rate of duty instead of the general rate of 5%.
The issuance of TCO No. 0903693 carries specific obligations and requirements for affected parties. Importers of the specified fluorescent tube holders can apply for a refund of duty paid on goods imported since 04 February 2009, the date the TCO is deemed to have come into effect (subsection 269S(1)). This TCO does not affect the rights of any person as they stood on the date of registration and does not impose any new liabilities. It is important for importers to be aware of the conditions under which the TCO applies and to submit any refund applications within the prescribed timeframes.
Breaching the terms of a TCO, or failing to comply with the conditions set out in the Customs Act 1901, may result in civil or criminal penalties. For example, under section 284 of the Act, anyone who knowingly imports goods in contravention of the Customs Act may face fines of up to $22,200 or imprisonment for up to two years, or both. Additionally, section 284A imposes penalties for making false or misleading statements in connection with the importation or exportation of goods, with penalties including fines of up to $55,500 and imprisonment for up to five years, or both. It is crucial for all parties to adhere to the legislative requirements to avoid these severe consequences.