EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0926725
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.
International Dynamics Australasia Pty Ltd applied for a TCO in respect of certain loud speakers on 24 July 2009.
Instrument
TCO No 0926725 was made on 09 October 2009. It declares that those certain loud speakers 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. 0926725 is taken to have come into force on 24 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 was enacted by the Parliament of Australia and serves as the foundational statute governing the regulation of customs and excise duties. It establishes a framework under which the Chief Executive Officer of Customs can issue Tariff Concession Orders (TCOs), as outlined in Part XVA of the Act. The primary problem this legislation addresses is the facilitation of trade by reducing customs duty rates on certain imported goods, provided these goods are not produced domestically and there are no suitable substitutes available in Australia. The objective of this mechanism is to encourage competition and innovation by allowing Australian businesses to access goods at a lower cost, thus promoting economic growth and consumer benefits. The process involves an application to the CEO, with a requirement for public consultation as stipulated in the Act, followed by the issuance of a TCO if the application meets the core criteria. The Customs Act 1901 thus aims to balance trade facilitation with the protection of domestic industries.
Scope and Application
The Customs Act 1901, specifically Part XVA, authorises the Chief Executive Officer of Customs to make Tariff Concession Orders (TCO) that reduce the rate of customs duty on certain goods, provided the application for such a concession meets specified criteria. The Act applies to any individual or entity that seeks to import goods that are not produced in Australia and that have no substitutable goods available locally, as per the definitions provided in sections 269D, 269E, and 269F. The geographic and jurisdictional reach of the Act is national, operating under the Commonwealth of Australia, although the concessions apply to imports entering Australia. The application process requires the CEO to be satisfied that no substitutable goods are produced in Australia and that the application does not relate to goods specified in section 269SJ, which are ineligible for concessions. The Act allows for the extension of its application through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the items and rates subject to concessions. The TCO in question, Instrument No. 0926725, pertains to certain loudspeakers and has a commencement date of 24 July 2009, the date on which the application was lodged.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0926725, as referenced in the Customs Act 1901, include sections 269F, 269C, 269B, and 269P(3) (sections 269F, 269C, 269B, and 269P(3)). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. Section 269C specifies that 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 269B defines terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods'. Lastly, section 269P(3) mandates that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order, declaring that the goods subject to the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies.
The obligations and requirements imposed by this Act on the parties or entities it governs primarily revolve around the application process for a TCO. An applicant must ensure their application is not in respect of goods specified in section 269SJ of the Act, which excludes certain goods from eligibility for a TCO. The CEO has the responsibility to determine whether an application meets the core criteria under section 269C and to make a written order if satisfied. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (subsection 269K(1)). This process ensures that all relevant parties have an opportunity to be heard before a TCO is issued.
There are no explicit offences, penalties, or civil/criminal consequences for breach mentioned in the text of this legislation. However, the provisions of the Customs Act 1901 and associated regulations would apply in the event of any non-compliance with the TCO or the application process. This could include potential penalties for incorrect declarations or misuse of tariff concessions, which are typically addressed under broader customs legislation and enforcement frameworks. The primary focus of the TCO is to facilitate tariff concessions for eligible goods, thereby benefiting importers by potentially reducing or eliminating customs duty on specified items.