EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0906220
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 Pty Ltd applied for a TCO in respect of certain lamp bases on 23 February 2009.
Instrument
TCO No 0906220 was made on 15 May 2009. It declares that those certain lamp bases 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. 0906220 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. 0906220, enacted under the Customs Act 1901, addresses the need for tariff concessions to be applied to specific goods that are not produced domestically, thereby facilitating trade and reducing costs for importers. The Customs Act 1901 allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) to provide lower rates of customs duty on goods not produced in Australia. This legislative instrument was introduced to streamline the process of granting tariff concessions, ensuring that importers benefit from reduced duty rates when importing certain goods. The Tariff Concession Instrument No. 0906220, which came into force on 23 February 2009, applies to certain lamp bases, offering a free rate of duty as opposed to the general 5% rate, thereby alleviating the financial burden on importers and promoting trade.
Scope and Application
The Tariff Concession Instrument No. 0906220 applies to the customs duty on certain lamp bases, facilitating a lower rate of duty for these goods under the Customs Act 1901. The Act applies to any person or entity seeking a tariff concession order (TCO) for goods that are not produced in Australia and for which no substitutable goods are produced domestically. The scope of the Act extends to industries importing these specific goods, providing them with tariff benefits if they meet the criteria set out in section 269C. The TCO operates on a national level, impacting all entities involved in the importation of the specified goods across Australia. The instrument allows for the exclusion of certain goods from the TCO scheme as per section 269SJ, and it does not affect the rights of any person as at the date of the application. The TCO, once registered, is effective from the date the application was lodged, and it does not impose any liabilities on persons other than the Commonwealth. Subordinate instruments may further detail the administration and enforcement of the tariff concessions.
Key Provisions
The Tariff Concession Instrument No. 0906220, made under the Customs Act 1901, provides for a tariff concession for certain lamp bases, as applied by Mercator Lighting Pty Ltd. Section 269F of the Act allows individuals to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) on specific goods, provided these goods are not listed in section 269SJ, which excludes certain items from TCO consideration. According to section 269C, a TCO application is valid if, on the application date, no substitutable goods were produced in Australia in the ordinary course of business. The definitions for "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively. If the CEO is satisfied that the application meets the core criteria, they must issue a written TCO order, as per section 269P(3). In this case, the CEO issued TCO No. 0906220 on 15 May 2009, declaring that the specified lamp bases are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of 5% reduced to free under the TCO.
The Customs Act 1901 imposes certain obligations on both the applicant and the CEO regarding TCO applications. According to section 269K(1), upon accepting an application as valid, the CEO must publish a notice in the Gazette inviting any interested parties to submit their views on why the TCO should not be granted. In this case, the CEO did not receive any submissions. Additionally, section 269S(1) stipulates that a TCO comes into force on the date the application is lodged. The TCO does not affect any pre-existing rights or liabilities, ensuring that only future imports benefit from the concession. Importers of these goods can apply for a duty refund under the Regulations, as outlined in paragraph 126(1)(r).
Failure to comply with the provisions of the Customs Act 1901 can result in various penalties and consequences. Although the specific penalties for breaching the TCO provisions are not detailed in the explanatory statement, the Act generally provides for both civil and criminal penalties for non-compliance with its requirements. Civil penalties may include fines, while criminal penalties could involve imprisonment, depending on the severity of the breach. The maximum penalties for breaches of customs laws are set out in the Customs Act 1901 and can vary significantly based on the nature and extent of the offence. It is important for all parties involved to adhere strictly to the Act's requirements to avoid these potential consequences.