EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0911232
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 lighting fixture parts on 2 April 2009.
Instrument
TCO No 0911232 was made on 24 August 2009. It declares that those certain lighting fixture parts 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. 0911232 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 Tariff Concession Instrument No. 0911232, made under the Customs Act 1901, was enacted in 2009 to address the issue of applying tariff concessions for certain imported goods. This legislation allows for the concession of customs duty on specific goods that are not produced in Australia and for which there are no substitutable goods available domestically. The instrument was introduced to support the policy objective of facilitating the importation of goods that are essential but not produced locally, thereby reducing costs for businesses and consumers. The Tariff Concession Order (TCO) in question was applied for by Mercator Lighting Pty Ltd on 2 April 2009, and the CEO of Customs was satisfied that the application met the core criteria. Consequently, the TCO was issued on 24 August 2009, granting a free rate of duty on certain lighting fixture parts previously subject to a 5% duty. This measure ensures that the rights of importers are protected and can benefit from duty refunds on goods imported since the effective date of the TCO.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which provide a reduced rate of customs duty on specific goods. An entity or person can apply to the CEO for a TCO if the goods in question do not fall under the categories specified in section 269SJ of the Act that are ineligible for concession. A TCO application is considered valid if no substitutable goods are produced in Australia at the time the application is lodged, as defined by sections 269C and 269D of the Act. Following the acceptance of a valid application, the CEO must publish a notice in the Gazette inviting submissions against the TCO, although no submissions were received for TCO No. 0911232. The TCO applies from the date the application is lodged, with no retroactive effect on the rights or liabilities of any party other than the Commonwealth, and allows for duty refunds for importers of the specified goods under the Customs Tariff Act 1995. The scope of the TCO is subject to any additional regulations or instruments that may be promulgated under the authority of the Customs Act 1901.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0911232 are sections 269C, 269B, 269P, and 269S. Section 269C of the Customs Act 1901 stipulates that a Tariff Concession Order (TCO) 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. Section 269B defines terms such as 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods', while section 269P(3) requires the Chief Executive Officer of Customs (CEO) to make a written order if the application meets the core criteria. Section 269S specifies that the TCO comes into force on the day the application for the TCO was lodged.
The Act imposes specific obligations and requirements on both the CEO and applicants for TCOs. The CEO must evaluate each TCO application to determine if it meets the core criteria outlined in section 269C. If the application meets these criteria, the CEO is obligated to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. The CEO must also ensure that the TCO does not affect the rights of any person as at the date of registration so as to disadvantage that person or impose liabilities on a person in respect of anything done or omitted to be done before the date of registration. Applicants for TCOs must provide sufficient information to enable the CEO to make an informed decision regarding the application.
The Customs Act 1901 provides for various offences, penalties, or civil/criminal consequences for breaches. Although the explanatory statement does not specify maximum penalties, breaches of the Act can generally result in fines or imprisonment. For example, section 269R of the Act stipulates that a person who contravenes an order made under the Act commits an offence. Penalties for such offences can include fines up to a significant amount or imprisonment for a specified period, depending on the severity of the breach. Additionally, any person who knowingly makes a false or misleading statement in an application for a TCO may face civil or criminal penalties.
In summary, Tariff Concession Instrument No. 0911232 applies to the process of granting tariff concessions for specific goods, as outlined in sections 269C, 269B, 269P, and 269S of the Customs Act 1901. The CEO must ensure that applications meet the core criteria and must publish notices inviting submissions. The rights of persons other than the Commonwealth are protected by ensuring that the TCO does not impose any disadvantages or liabilities. Breaches of the Act may result in significant civil or criminal penalties.