EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0909138
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.
DH Technology applied for a TCO in respect of certain adjustable stands on 18 March 2009.
Instrument
TCO No 0909138 was made on 29 May 2009. It declares that those certain adjustable stands 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. 0909138 is taken to have come into force on 18 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, enacted by the Australian Parliament, provides a framework for the administration of customs and excise, including the ability to issue Tariff Concession Orders (TCOs) that reduce or eliminate customs duty on specified goods. One such instrument, Tariff Concession Instrument No. 0909138, was introduced to address the specific need for reduced tariff rates on certain adjustable stands, as requested by DH Technology. The problem this instrument sought to address was the absence of locally produced alternatives for these goods, thereby satisfying the core criteria under section 269C of the Act. This legislative action aimed to ensure that Australian importers of these adjustable stands could benefit from a reduced duty rate, ultimately enhancing their competitive position within the market. The instrument was enacted without any adverse impact on the rights of third parties, and it provides a mechanism for duty refunds to importers for goods imported since the effective date of the concession.
Scope and Application
The Customs Act 1901 applies to individuals and entities seeking tariff concessions on imported goods. Specifically, the Act governs the application process for Tariff Concession Orders (TCOs) under Part XVA, which are issued by the Chief Executive Officer of Customs (CEO) to provide reduced or waived customs duties on specified goods. The legislation mandates that for an application to be considered, the goods must not be of a type that is explicitly prohibited under section 269SJ of the Act, and it requires that no substitutable goods are produced in Australia in the ordinary course of business. The geographic reach of this Act is national, as it is a Commonwealth Act, and its provisions extend across Australia. The CEO is required to publish a notice in the Gazette inviting submissions on TCO applications, although in the case of TCO No. 0909138, no submissions were received. The commencement date for a TCO is the day the application is lodged, and in this instance, the TCO was effective from 18 March 2009. Importantly, the TCO does not retroactively affect the rights of any person and imposes no new liabilities on individuals or entities, except for the Commonwealth.
Key Provisions
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0909138, allows the Chief Executive Officer (CEO) of Customs to grant Tariff Concession Orders (TCOs) for certain goods (section 269F). This order, made on 29 May 2009, pertains specifically to certain adjustable stands, which are now subject to a rate of free duty instead of the general rate of 5% (item 50 of Schedule 4 to the Customs Tariff Act 1995). A TCO application meets the core criteria if no substitutable goods are produced in Australia on the day the application is lodged, as per sections 269C and 269P(3) of the Customs Act.
The obligations imposed by this Act on the parties involved are primarily centred around the application and approval process for TCOs. An applicant must ensure their application is not for goods specified in section 269SJ of the Act, which lists those goods ineligible for TCOs. The CEO, on the other hand, must assess whether the application meets the core criteria and, if satisfied, make a written order declaring that the goods in question are eligible for the tariff concession. Additionally, as per section 269K(1) of the Customs Act, the CEO is required to publish a notice in the Gazette inviting any interested parties to submit objections to the TCO application. In this case, no submissions were received by the CEO.
Failure to comply with the provisions of the Customs Act and the regulations governing TCOs can result in civil or criminal penalties. While the Act does not specify particular penalties for breaches related to TCOs, it is worth noting that general provisions within the Customs Act may apply. For example, under section 254 of the Customs Act, a person who knowingly or recklessly contravenes a provision of the Act may be liable for a penalty of up to $22,200 for an individual and $111,000 for a body corporate, depending on the severity of the offence. Furthermore, in cases of serious or repeated breaches, criminal prosecution may ensue, leading to more severe penalties.