EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0914254
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 applied for a TCO in respect of certain ceilling fan lighting fixture and casing on 29 April 2009.
Instrument
TCO No 0914254 was made on 24 July 2009. It declares that those certain ceilling fan lighting fixture and casing 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. 0914254 is taken to have come into force on 29 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 Australian Parliament, provides a framework for the imposition of customs duties on imported goods. One of the mechanisms within this Act is the Tariff Concession Order (TCO), which allows for reduced or waived customs duties on specific goods. The Tariff Concession Instrument No. 0914254, enacted in 2009, addresses the need to provide tariff relief for certain goods by allowing the Chief Executive Officer of Customs to reduce or exempt duties on specified items if no substitutable goods are produced in Australia. This instrument aims to benefit importers by potentially reducing their duty liabilities on goods that are subject to a TCO, as long as no objections are raised and the criteria for the concession are met. The policy objective is to promote fair trade practices and provide economic relief to industries that rely on importing specific goods.
Scope and Application
The Tariff Concession Instrument No. 0914254 applies to the specific goods, namely certain ceiling fan lighting fixtures and casings, as identified by Mercator Lighting, and pertains to the application of a lower rate of customs duty as provided under the Customs Act 1901. The Act operates under the broader framework established by Part XVA, which allows for the issuance of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs (CEO). This application is limited to the goods specified in the instrument and is contingent upon the CEO determining that no substitutable goods are produced in Australia in the ordinary course of business, thus meeting the core criteria as outlined in the Act. The TCO grants tariff concessions by effectively setting the duty rate for these particular goods to zero, whereas the standard rate is 5%.
Geographically, the application and effect of this TCO are national in scope, applying across Australia in accordance with the Customs Act 1901, which is a Commonwealth Act. The TCO does not extend beyond the specified goods and does not affect the rights of any persons as at the date of registration concerning actions taken prior to this date. The instrument came into effect on 29 April 2009, the date the application was lodged, and does not impose any liabilities on persons other than the Commonwealth. Any person who believes the TCO should not be made may submit reasons to the CEO, although in this instance, no submissions were received.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0914254 pertain to the granting of tariff concessions for specific goods, as outlined in sections 269C, 269B, 269D, 269E and 269P of the Customs Act 1901. The instrument was made under section 269F of the Act, allowing for the application of a lower rate of customs duty for the specified goods if certain conditions are met. According to section 269C, a Tariff Concession Order (TCO) application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Section 269B defines key terms such as 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods'. If the Chief Executive Officer of Customs (CEO) is satisfied that the application meets these criteria, they must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, as per section 269P(3).
The Act imposes several obligations on the parties involved. Firstly, any person who wishes to apply for a TCO must ensure their application meets the core criteria, which include the absence of substitutable goods produced in Australia at the time of application. The CEO is obligated to publish a notice in the Gazette inviting any person to submit objections if they believe the TCO should not be made. In this case, no objections were received, indicating that the CEO was able to proceed with the order. Additionally, the CEO must make a written order if they are satisfied that the application meets the core criteria.
Failure to comply with the provisions of the Customs Act 1901 and the Tariff Concession Instrument No. 0914254 may result in civil or criminal consequences. While the explanatory statement does not detail specific offences or penalties, breaches of the Customs Act could lead to fines or imprisonment, as per the general penalties outlined in the Act for non-compliance with customs regulations. The specific penalties for breach would depend on the nature and severity of the violation.
In summary, Tariff Concession Instrument No. 0914254 provides a mechanism for granting lower customs duty rates on certain goods, subject to specific conditions being met. It imposes obligations on applicants and the CEO, and while the explanatory statement does not specify the penalties for non-compliance, breaches of the Customs Act may result in civil or criminal consequences.