EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0924758
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.
CHED Services Pty Ltd applied for a TCO in respect of certain electricity meters on 13 July 2009.
Instrument
TCO No 0924758 was made on 2 October 2009. It declares that those certain electricity meters 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. 0924758 is taken to have come into force on 13 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. 0924758, enacted under the Customs Act 1901, was introduced to address the need for tariff concessions on specific goods. This legislation allows the Chief Executive Officer of Customs to grant tariff concessions, thereby reducing the customs duty on certain imported goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. CHED Services Pty Ltd applied for this concession on certain electricity meters, which were subsequently granted by the CEO of Customs. This instrument facilitates the importation of these goods at a reduced duty rate, effective from the date of the application, thereby potentially benefiting importers who may apply for duty refunds on previously imported goods. The policy objective of this instrument is to encourage the importation of goods that are not domestically produced, thereby supporting market access and competition within Australia.
Scope and Application
The Tariff Concession Instrument No. 0924758 under the Customs Act 1901 applies to any person or entity that makes an application to the Chief Executive Officer of Customs for a Tariff Concession Order (TCO) in respect of certain goods. Specifically, the Act applies to electricity meters as outlined in the instrument. The application of the Act is limited to instances where no substitutable goods are produced in Australia in the ordinary course of business, as defined in sections 269D and 269E of the Act. This instrument extends to the national jurisdiction of Australia, ensuring that the concessions apply across the entire Commonwealth. The Act does not impose any liabilities on persons other than the Commonwealth and does not disadvantage any person by affecting their rights as at the date of registration. The instrument was made on 2 October 2009, and it is taken to have come into force on 13 July 2009, the date the application was lodged. The TCO provides a benefit to importers by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The Customs Act 1901, particularly under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) which apply reduced rates of customs duty on specified goods. A TCO can be applied for under section 269F, provided the goods are not those listed in section 269SJ, which are ineligible for such concessions. The CEO must consider whether the application meets the core criteria, primarily determined by section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The definitions of key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively.
Once the CEO determines that an application meets these core criteria, they are obligated under section 269P(3) to issue a written TCO, specifying the goods and the applicable reduced rate of customs duty as per the Customs Tariff Act 1995. This process was followed in the case of CHED Services Pty Ltd, which applied for a TCO on certain electricity meters on 13 July 2009. The CEO issued TCO No. 0924758 on 2 October 2009, specifying that these meters would be subject to a zero rate of duty, down from the general rate of 5%.
The CEO is also required by subsection 269K(1) to publish a notice in the Gazette inviting submissions from any interested parties who might have reasons against the TCO being issued. In this instance, no such submissions were received. The TCO is deemed to have come into force on the date of the application under subsection 269S(1), which in this case was 13 July 2009. Importantly, the TCO does not retroactively affect the rights of any person, except to the benefit of importers who can now apply for a refund of duty on goods imported since the effective date of the TCO.
Failure to comply with the requirements of the Customs Act 1901 and associated regulations can lead to legal consequences. The Act provides for both civil and criminal penalties for breaches, including fines and imprisonment. While the specific penalties are not detailed in this instrument, the seriousness of non-compliance is underscored by the potential for such severe consequences, which serve to ensure adherence to the legislative framework governing customs duties and tariff concessions.