EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0906486
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.
Iworld Australia applied for a TCO in respect of certain radio receivers on 24 February 2009.
Instrument
TCO No 0906486 was made on 15 May 2009. It declares that those certain radio receivers 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. 0906486 is taken to have come into force on 24 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 was enacted by the Australian Parliament to facilitate the administration of customs duties and related matters. In 2009, Tariff Concession Instrument No. 0906486 was introduced to address a gap in the tariff concession scheme outlined in Part XVA of the Act. This instrument was designed to provide tariff concessions for certain goods, reducing their customs duty rate to zero if no substitutable goods are produced in Australia. The instrument was created in response to an application by Iworld Australia for tariff concessions on specific radio receivers, which were granted after the Chief Executive Officer of Customs was satisfied that the core criteria were met, including the absence of substitutable goods produced in Australia. The instrument came into effect on the date of the application, 24 February 2009, and does not impose any liabilities or disadvantage any person except the Commonwealth, potentially benefiting importers by allowing them to apply for duty refunds on imports made since the TCO came into force.
Scope and Application
The Tariff Concession Instrument No. 0906486, made under the Customs Act 1901, applies to specific radio receivers that Iworld Australia applied for on 24 February 2009. The instrument was issued by the Chief Executive Officer of Customs on 15 May 2009, after determining that no substitutable goods were being produced in Australia at the time of the application. The application of this Tariff Concession Order (TCO) means that the specified radio receivers are subject to a tariff item in the Customs Tariff Act 1995, resulting in a duty rate of free, down from the general rate of 5%. This concession applies nationally, affecting the rights of importers who can now seek refunds for duties paid on the goods since the TCO's effective date, which is 24 February 2009. The TCO does not disadvantage any person or impose liabilities on anyone for actions taken before its registration, ensuring that only the Commonwealth and importers of the specified goods are affected beneficially by this order.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0906486, under the Customs Act 1901 (section 269F), allow for the application of Tariff Concession Orders (TCOs) to specific goods by the Chief Executive Officer of Customs (CEO). A TCO application is considered valid if it does not pertain to goods that are listed in section 269SJ of the Act, which includes goods that cannot be subject to a TCO. For an application to meet the core criteria, it must be established that no substitutable goods were produced in Australia on the date of the application (section 269C). If the CEO is satisfied with the application, they must issue a written order declaring that the goods in question are subject to a prescribed rate of duty (subsection 269P(3)). In this case, TCO No. 0906486 applies to certain radio receivers, making them eligible for a free rate of duty instead of the general 5% rate.
The obligations imposed by the Act on the parties involved primarily concern the CEO, who must evaluate TCO applications against the core criteria. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties who may oppose the granting of a TCO (subsection 269K(1)). The CEO has the responsibility to consider these submissions and make a decision based on the merits of the application. Additionally, the Act mandates that TCOs are effective from the date of the application (subsection 269S(1)), meaning that any rights or duties concerning the goods in question are governed from that date.
In terms of offences and penalties, the Customs Act 1901 does not explicitly outline specific penalties for breaches related to TCOs. However, any actions taken in contravention of the Act or the regulations could potentially lead to civil or criminal consequences, depending on the nature and severity of the breach. The Act's provisions are designed to ensure that the process for granting TCOs is transparent and fair, allowing for public input and adherence to legislative criteria. It is important for all parties to comply with the Act's requirements to avoid any potential legal repercussions.