EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0906257
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 floor lamps on 23 February 2009.
Instrument
TCO No 0906257 was made on 15 May 2009. It declares that those certain floor lamps 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. 0906257 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 Customs Act 1901, enacted by the Australian Parliament, establishes a framework under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This legislation was introduced to address the issue of providing tariff concessions on certain goods, ensuring that such concessions are granted in circumstances where substitutable goods are not produced in Australia. The Tariff Concession Instrument No. 0906257, made on 15 May 2009, provides for a tariff concession on specific floor lamps, reducing the duty from the general rate of 5% to free, effective from 23 February 2009, the date the application was lodged. This instrument was introduced following an application by Conexus, and no submissions opposing the concession were received. The policy objective is to benefit importers by allowing them to apply for refunds on duty paid on these goods since the effective date of the concession.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCO) scheme, facilitates the granting of lower customs duty rates for specified goods by the Chief Executive Officer of Customs, provided certain conditions are met. The Act applies to individuals or entities that seek to import goods which are not specified in section 269SJ of the Act and for which no substitutable goods are produced in Australia in the ordinary course of business. The instrument, TCO No. 0906257, specifically addresses floor lamps and reduces their duty from a general rate of 5% to a free rate, effective from the date the application was lodged, 23 February 2009. This instrument operates within the national jurisdiction of Australia, encompassing all states and territories. The Act’s provisions ensure that the TCO does not disadvantage any person other than the Commonwealth and does not impose liabilities on persons for actions taken prior to the registration of the TCO. Additionally, the rights of importers are positively affected, as they can apply for duty refunds on goods imported since the TCO’s effective date. The scope of the Act can be extended or modified through subordinate instruments, ensuring flexibility in its application to different goods and industries.
Key Provisions
The Tariff Concession Instrument No. 0906257, made under the Customs Act 1901, primarily establishes a tariff concession order (TCO) for certain floor lamps, reducing the rate of customs duty from the general rate of 5% to free (Section 269P(3)). This instrument follows the application made by Conexus on 23 February 2009, which was processed by the Chief Executive Officer of Customs (CEO) under Section 269F of the Act. The CEO’s decision to issue the TCO was based on the satisfaction that the core criteria set out in Section 269C of the Act were met, particularly the absence of substitutable goods produced in Australia (Section 269D and 269E). This means that on the date the application was lodged, no equivalent products were being manufactured domestically, thereby qualifying the floor lamps for the tariff concession.
Entities and individuals governed by this Act must adhere to the criteria for TCO applications as stipulated in Sections 269B to 269F. The CEO’s obligation, upon receiving a valid TCO application, includes publishing a notice in the Gazette inviting public submissions on the application (Section 269K(1)). Although no submissions were received in this instance, the process ensures transparency and allows for public input where necessary. Additionally, the CEO must ensure that the TCO is issued if the application meets the core criteria and does not pertain to goods specified in Section 269SJ of the Act, which are ineligible for TCOs.
Failing to comply with the provisions of the Customs Act 1901 or the terms of a TCO may result in legal consequences. Under Section 269R of the Act, penalties for non-compliance can include substantial fines and, in severe cases, imprisonment. The specific penalties for breaches of the Customs Act can vary based on the nature and severity of the offence. For example, fraudulent claims for tariff concessions could result in fines of up to $22,200 or imprisonment for up to two years, or both, as stipulated under Section 236 of the Act. The imposition of penalties aims to enforce compliance and maintain the integrity of the tariff concession scheme.