EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0911230
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.
Mercator Lighting Pty Ltd applied for a TCO in respect of certain parts for non-ceramic lighting fixtures on 2 April 2009.
Instrument
TCO No 0911230 was made on 21 August 2009. It declares that those certain parts for non-ceramic lighting fixtures 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. 0911230 is taken to have come into force on 2 April 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 Parliament of Australia, provides a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO) to offer lower rates of customs duty on specific goods. This legislative instrument addresses the problem of ensuring that certain imported goods receive tariff concessions where no substitutable goods are produced domestically, thus supporting competitive markets and potentially encouraging local production by making imported goods more price-competitive. In accordance with the Act, Mercator Lighting Pty Ltd successfully applied for a TCO concerning certain parts for non-ceramic lighting fixtures, which was issued on 21 August 2009. The TCO, effective from 2 April 2009, exempts these specific goods from the general 5% duty rate, setting it to free, thereby enhancing the policy objective of facilitating access to competitively priced imported goods where no local alternatives exist.
Scope and Application
The Tariff Concession Instrument No. 0911230 under the Customs Act 1901 applies to individuals or entities seeking tariff concessions for specific goods, namely certain parts for non-ceramic lighting fixtures, and it is relevant for those involved in the importation of such goods. The geographic reach of this instrument is national, as it pertains to the entire Commonwealth of Australia. The application of this instrument is contingent upon the core criteria set out in the Act, specifically under section 269C, which mandates that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The instrument exempts any goods specified in section 269SJ of the Act, which lists items that cannot be subject to a tariff concession order. The instrument extends its application through subordinate instruments such as the Customs Tariff Act 1995, which specifies the applicable duty rates. The commencement date of this particular tariff concession, TCO No. 0911230, is 2 April 2009, the date on which the application was lodged, and it does not impose any liabilities on any person nor affect the rights of a person as at the date of registration.
Key Provisions
The main operative sections of the Customs Act 1901 in relation to Tariff Concession Orders (TCOs) are sections 269C, 269B, 269D, 269E, 269F, 269P, and 269SJ. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods, provided the goods are not specified in section 269SJ. If the application is deemed valid, the CEO must determine if it meets the core criteria outlined in section 269C. This requires that, on the day the application is lodged, no substitutable goods are produced in Australia in the ordinary course of business, as defined in sections 269B, 269D, and 269E. If the application meets these criteria, the CEO must make a written TCO, declaring that the specified goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Customs Act 1901 on the parties and entities it governs include the requirement for the CEO to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid. This notice must invite any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO. In this case, no submissions were received. Furthermore, the Act requires that the rights of a person (other than the Commonwealth) are not adversely affected by the TCO as at the date of registration, nor are they imposed with any liabilities for actions taken before the registration date. Importers, however, benefit from the ability to apply for a refund of duty on goods imported since the date the TCO is taken to have come into force.
In terms of offences and penalties, the Act does not specify any direct criminal or civil penalties for breaches of the TCO provisions. However, any misuse or fraudulent activities related to the application of TCOs may incur broader penalties under other sections of the Customs Act 1901 or associated regulations. For example, engaging in fraudulent activities to benefit from the TCO could lead to fines or imprisonment under the broader customs legislation. Additionally, failure to comply with the requirements of the TCO, such as incorrectly claiming a tariff concession, could result in financial penalties or the requirement to repay any incorrectly claimed duty.