EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0922793
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.
Home Theatre Group applied for a TCO in respect of certain wall or ceiling speaker mounts on 02 July 2009.
Instrument
TCO No 0922793 was made on 18 September 2009. It declares that those certain wall or ceiling speaker mounts 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. 0922793 is taken to have come into force on 02 July 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. 0922793 was enacted as part of the Customs Act 1901, which establishes a scheme for making Tariff Concession Orders (TCOs). These orders allow for a lower rate of customs duty on specific goods, provided they meet certain criteria. The instrument addresses the problem of applying for tariff concessions to ensure that Australian businesses can import certain goods without incurring high customs duties, thereby supporting competitive pricing and economic efficiency. This particular instrument was introduced to address the specific need of Home Theatre Group for tariff concessions on wall or ceiling speaker mounts, which, if granted, would reduce the duty from 5% to free. The instrument was created following an application to the Chief Executive Officer of Customs, who confirmed that no substitutable goods were produced in Australia, thereby meeting the core criteria for a tariff concession.
The Tariff Concession Instrument was enacted by the relevant authority under the Customs Act 1901, with the primary objective of facilitating lower customs duties on imported goods that do not have local alternatives. This policy objective aims to support Australian businesses by reducing their costs, which can enhance competitiveness and economic activity. The instrument was registered on 18 September 2009, and it is effective from 2 July 2009, the date the application was lodged. Importantly, it does not impose any new liabilities on persons other than the Commonwealth and does not disadvantage existing rights, while providing potential benefits to importers who can apply for duty refunds on goods imported since the effective date.
Scope and Application
The Customs Act 1901, through its Part XVA, governs the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, aimed at applying lower rates of customs duty to specified goods. This legislative framework applies to individuals or entities that seek to import goods eligible for tariff concessions, provided these goods are not specified in section 269SJ, which lists goods ineligible for such concessions. The Act operates on a national scale, administered by the Commonwealth. To qualify for a TCO, the application must meet core criteria, including the absence of substitutable goods produced in Australia, as defined by sections 269C, 269D, and 269E of the Act. The instrument in question, TCO No. 0922793, pertains specifically to certain wall or ceiling speaker mounts, granting them a free rate of duty instead of the general 5% rate, and came into effect on the date the application was lodged, 02 July 2009. The TCO does not retroactively affect the rights or liabilities of any party other than the Commonwealth and does not impose any new liabilities on individuals or entities.
Key Provisions
Section 269F of the Customs Act 1901 allows any person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of specific goods. If the CEO determines that the application pertains to goods that are not explicitly excluded by section 269SJ of the Act, the CEO must assess whether the application meets the core criteria set out in section 269C. Specifically, the application is deemed to meet the core criteria if, on the date the application was lodged, no substitutable goods were being produced in Australia in the ordinary course of business. Definitions for these terms are provided in sections 269D (goods produced in Australia), 269E (ordinary course of business), and 269F (substitutable goods).
The Act imposes certain obligations on the CEO in processing a TCO application. Upon accepting a valid application, the CEO must publish a notice in the Gazette, inviting any interested parties to submit their views on whether the TCO should be granted. If no submissions are received, the CEO is required to proceed with the decision-making process. Once the CEO is satisfied that the application meets the core criteria, they 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.
In terms of consequences for non-compliance, the Act does not explicitly outline specific offences, penalties, or civil/criminal consequences for breaching the provisions related to TCOs. However, the Act does provide for general penalties under other sections for related customs-related offences, which could potentially include fines and imprisonment. The specific penalties would depend on the nature and severity of the breach, as determined by the relevant authorities. Additionally, failure to comply with the provisions could result in the nullification of any tariff concessions granted under the TCO.