EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0906219
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.
Mercator Lighting applied for a TCO in respect of certain outdoor lights on 23 February 2009.
Instrument
TCO No 0906219 was made on 12 June 2009. It declares that those certain outdoor 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. 0906219 is taken to have come into force on 23 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. 0906219, enacted in 2009 under the Customs Act 1901, was introduced to address the need for tariff concessions on specific goods that are not produced domestically. This instrument allows for a lower rate of customs duty on certain goods, providing a benefit to importers by potentially reducing the duty payable on these items. The instrument was made in response to an application by Mercator Lighting for tariff concessions on certain outdoor lights, following a process where the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, thereby meeting the core criteria for such concessions.
The instrument was developed and enacted by the Australian Parliament to streamline the process of providing tariff concessions on specific imported goods. The objective, as outlined in the Customs Act 1901, is to facilitate trade by reducing the customs duty on goods that are not produced domestically, thus enhancing the competitiveness of these goods in the Australian market. This instrument exemplifies the legislative intent to support import activities and economic efficiency by ensuring that certain imported goods face lower tariff barriers.
Scope and Application
The Tariff Concession Instrument No. 0906219, established under the Customs Act 1901, applies to individuals or entities seeking a tariff concession order (TCO) for specific goods, ensuring that these goods qualify for a reduced customs duty rate. The application process involves the Chief Executive Officer of Customs, who evaluates whether the application meets the core criteria, specifically if there are no substitutable goods produced in Australia at the time of application. The instrument is effective for goods that are subject to the Customs Tariff Act 1995, with the TCO in question concerning certain outdoor lights, which now enjoy a zero-rate duty compared to the general rate of 5%. The instrument applies nationally across Australia, with the TCO taking effect from the date the application was lodged, which in this case was 23 February 2009. Notably, the TCO does not impose any liabilities on persons other than the Commonwealth and does not affect the rights of any person as at the date of registration, except to beneficially affect the rights of importers who can apply for a refund of duty on goods imported since the TCO's effective date.
Key Provisions
The Customs Act 1901 (section 269F) allows for the application of Tariff Concession Orders (TCOs) by any person to the Chief Executive Officer of Customs (CEO) for certain goods. When a person lodges an application for a TCO, the CEO must determine whether the application is in respect of goods that cannot be subject to a TCO as outlined in section 269SJ of the Act. If the application is valid, the CEO must consider whether the core criteria for a TCO are met as per section 269C of the Act, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the core criteria are met, they must make a written order (section 269P(3)) that specifies the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applicable to the goods in question.
The obligations imposed on parties by this legislation primarily involve the requirement for the CEO to assess the validity of an application for a TCO and to ensure that the core criteria are met before making an order. Section 269K(1) mandates that the CEO publish a notice in the Gazette inviting submissions from any interested party if they consider that there are reasons why the TCO should not be made. The CEO must then review any submissions received and make a decision based on the evidence presented. The CEO has an obligation to ensure transparency and fairness in the process by allowing interested parties to voice their concerns.
Breaches of the requirements outlined in the Customs Act 1901 can result in various penalties. Although specific offences and penalties are not detailed in this particular Explanatory Statement, under Australian law, general offences related to customs and border protection can include civil penalties for providing false or misleading information, or criminal penalties for more serious breaches such as smuggling or fraud. The maximum penalties for such offences can vary widely, depending on the severity and intent behind the breach. In this specific context, if a party submits false information in an application for a TCO, they could face fines or other civil penalties. For more serious criminal offences related to customs, penalties can include imprisonment, with the maximum penalties depending on the specific offence and jurisdiction.