EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0907257
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 outdoor lights on 02 March 2009.
Instrument
TCO No 0907257 was made on 22 May 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. 0907257 is taken to have come into force on 02 March 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, as amended, includes a scheme for Tariff Concession Orders (TCOs), which allow for reduced customs duties on certain goods under specific circumstances. Enacted by the Parliament of Australia, this legislation aims to address the problem of ensuring competitive pricing for imported goods that do not have locally produced substitutes. The Act enables the Chief Executive Officer of Customs to apply tariff concessions, thereby facilitating trade and potentially boosting economic activity by making imported goods more affordable. The Tariff Concession Instrument No. 0907257, enacted on 22 May 2009, provides a concrete example of this mechanism, granting tariff concessions for certain outdoor lights, effectively reducing their duty from 5% to free. This initiative aligns with the policy objective of promoting fair trade practices while supporting the competitive landscape of Australian markets.
Scope and Application
The Customs Act 1901, through Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to individuals and entities that seek to import goods for which a lower rate of customs duty can be applied under a TCO. Specifically, the Act is relevant to those who wish to import goods that do not have substitutable products manufactured in Australia and for which no submissions are received opposing the concession. The scope of the Act extends across the Commonwealth of Australia, impacting various industries and transactions involving the importation of goods. The Act does not apply to goods specified in section 269SJ, which are ineligible for TCOs. Additionally, the application of the Act can be further detailed and expanded through subordinate instruments, although the primary legislation itself sets out the core criteria and conditions for TCOs.
Key Provisions
The Customs Act 1901 (the Act) provides a framework for the Chief Executive Officer of Customs (the CEO) to make Tariff Concession Orders (TCOs) under section 269F. An application for a TCO can be made by a person, and if it satisfies certain criteria, the CEO may declare that a lower rate of customs duty applies to the goods in question. Section 269C states that the application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged.
The CEO must then issue a written order, a TCO, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question (subsection 269P(3)). For example, TCO No. 0907257, made on 22 May 2009, declared that certain outdoor lights are subject to item 50 of Schedule 4 to the Tariff, with a duty rate of free instead of the general rate of 5%.
The obligations imposed on the CEO under the Act include accepting a TCO application if it is not in respect of goods specified in section 269SJ and assessing whether it meets the core criteria. If satisfied, the CEO must make the TCO. The CEO must also publish a notice in the Gazette as soon as practicable after accepting a valid TCO application, inviting submissions from any person who considers the TCO should not be made (subsection 269K(1)). TCOs are taken to have come into force on the day on which the application was lodged (subsection 269S(1)).
Any breach of the obligations under the Act may lead to civil or criminal consequences, though the explanatory statement does not specify these. The maximum penalties for breaches of the Customs Act 1901 can be significant, including fines and imprisonment, depending on the nature and severity of the offence. It is important to adhere to the requirements of the Act to avoid these consequences.