EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0922794
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 desk or cabinet mountings on 02 July 2009.
Instrument
TCO No 0922794 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. 0922794 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for managing customs and excise through various provisions, including the establishment of a scheme for Tariff Concession Orders (TCOs). This scheme, particularly under Part XVA, allows for the reduction of customs duties on specific goods, provided certain criteria are met. One such criterion is that the goods should not have substitutable alternatives produced in Australia. The 2010 Explanatory Statement relates to Tariff Concession Instrument No. 0922794, which was introduced to address the need for tariff concessions on certain desk or cabinet mountings, specifically wall or ceiling speaker mounts, by lowering the duty rate from the general 5% to free. The policy objective is to ensure that such goods, which have no Australian-produced equivalents, benefit from reduced customs duties, thereby encouraging their importation and use. The instrument was made after a successful application by Home Theatre Group and became effective from the date of application, 2 July 2009.
Scope and Application
The Customs Act 1901 applies to entities and individuals involved in the importation of goods into Australia, with specific provisions governing the application of customs duties and the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This particular instrument, Tariff Concession Instrument No. 0922794, pertains to the concession of customs duty for certain wall or ceiling speaker mounts, which will now be subject to a rate of duty of free rather than the general rate of 5%. The Act extends to the entire Commonwealth of Australia and applies to any goods that are not specified in section 269SJ of the Act, which outlines goods that cannot be subject to a TCO. The CEO must ensure that no substitutable goods are produced in Australia in the ordinary course of business before approving a TCO application. Subordinate instruments can further extend or restrict the application of the Act, although this specific instrument does not delve into such details. The instrument came into force on 02 July 2009, the date on which the relevant application was lodged, and does not disadvantage any person by imposing liabilities for actions taken prior to its registration.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0922794 under the Customs Act 1901 include section 269C, which specifies the criteria for a Tariff Concession Order (TCO) application. A 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 269C). Section 269B provides definitions for key terms such as "goods produced in Australia", "ordinary course of business" and "substitutable goods". Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that a TCO application meets the core criteria, the CEO must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations and requirements imposed by the Act on the parties involved include the obligation for applicants to ensure that their applications are made in accordance with the criteria set out in section 269C. The CEO is required to assess the application and make a decision based on whether the core criteria are met. If the application meets the criteria, the CEO must issue a TCO. The CEO must also publish a notice in the Gazette inviting any person who believes the TCO should not be made to lodge a submission (subsection 269K(1)). In this case, the CEO did not receive any submissions.
There are no explicit offences, penalties, or civil or criminal consequences outlined for breaches of the Act in relation to the TCO process. However, the Act does provide for a refund of duty for importers under paragraph 126(1)(r) of the Regulations. The TCO itself does not impose any liabilities on any person, as stated in the legislation. The general rate of duty for the goods subject to the TCO is reduced from 5% to free, which benefits importers who have already imported the goods since the TCO is taken to have come into force on the day the application was lodged.