EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0906256
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 lights and light fittings on 23 February 2009.
Instrument
TCO No 0906256 was made on 15 May 2009. It declares that those certain lights and light fittings 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. 0906256 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. 0906256, enacted in 2009, was introduced to address the need for facilitating imports of certain goods by providing tariff concessions under the Customs Act 1901. This instrument allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that lower the rate of customs duty for specified goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. Conexus' application for a TCO concerning certain lights and light fittings was approved by the CEO, resulting in Instrument TCO No. 0906256, which applies a duty rate of free, instead of the general rate of 5%. The TCO came into effect on the day the application was lodged, 23 February 2009, and importers of these goods can apply for a refund of duty from this date. The enactment body, the Commonwealth Parliament, aimed to promote efficient trade and economic benefits through tariff concessions.
Scope and Application
The Tariff Concession Instrument No. 0906256, made under the Customs Act 1901, applies to the concession of customs duty rates for certain lights and light fittings, as applied by the Chief Executive Officer of Customs. This Act is applicable to any person or entity seeking tariff concessions for goods that are not produced domestically in Australia, thereby ensuring that imports do not compete with local production. The geographic reach of the Act is national, as it applies across all states and territories within Australia, governed under the Commonwealth framework. The Act does not apply to goods specified in section 269SJ of the Customs Act 1901, which are ineligible for tariff concessions. The application process includes public consultation as mandated by the Act, though in this instance, no submissions were received. The commencement of the Tariff Concession Order is effective from the date the application was lodged, namely 23 February 2009, and it does not disadvantage any existing rights or impose new liabilities on individuals or entities apart from the Commonwealth.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0906256 under the Customs Act 1901 (sections 269C, 269F, 269P, and 269S) govern the process by which Tariff Concession Orders (TCOs) can be applied for and granted. Section 269F allows an application to be made to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. If the application is not for goods specified in section 269SJ, the CEO must then assess whether the application meets the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If these criteria are satisfied, the CEO is mandated under section 269P(3) to issue a written order (a TCO) applying a prescribed tariff item to the goods in question.
The obligations imposed by the Act on the CEO and applicants include the requirement to assess the validity of a TCO application against the core criteria (section 269C) and to ensure no substitutable goods are produced in Australia. Additionally, the CEO must publish a notice in the Gazette (subsection 269K(1)) inviting submissions from interested parties if they believe the TCO should not proceed. The Act also requires that the TCO be issued if the core criteria are met, effectively reducing the duty on the specified goods.
Failure to comply with the obligations outlined in the Act may lead to legal repercussions. Although the explanatory statement does not explicitly detail penalties for non-compliance, breaches of customs regulations generally attract penalties under the Customs Act 1901. These can include fines and imprisonment. The severity of the penalties depends on the nature and extent of the breach, but the maximum penalties for serious offences can include substantial fines and significant periods of imprisonment.
The TCO itself does not affect the rights of any person, except the Commonwealth, in a way that would disadvantage them or impose liabilities for actions taken prior to the registration of the TCO (subsection 269S(1)). Importers, however, stand to benefit from the TCO as they may apply for a refund of duty on goods imported since the TCO's effective date under paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any new liabilities on any person, ensuring that the rights and obligations of parties remain unchanged except as explicitly provided for in the Act and the TCO.