EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0927632
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.
Crest Electronics Pty Ltd applied for a TCO in respect of certain wall mounting brackets on 31 July 2009.
Instrument
TCO No 0927632 was made on 16 October 2009. It declares that those certain wall mounting brackets 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. 0927632 is taken to have come into force on 31 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 Australian Parliament to establish a comprehensive framework for the administration of customs duties and regulations. The Act aims to ensure the effective collection of duties and taxes on imported goods, regulate the import and export of goods, and facilitate trade. Part XVA of the Customs Act 1901 introduces a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs, allowing for lower rates of customs duty on specific goods. This mechanism was designed to address gaps in the availability of certain goods within Australia by reducing the duty on items that are not produced domestically, thereby making these goods more affordable and accessible. The Tariff Concession Instrument No. 0927632, which was made on 16 October 2009, is an example of this scheme in action, providing tariff concessions for certain wall mounting brackets, reducing the duty from 5% to free, and thereby aligning with the policy objective of supporting Australian trade and consumer access to affordable goods.
Scope and Application
The Tariff Concession Instrument No. 0927632, made under Part XVA of the Customs Act 1901, applies to specific goods for which a Tariff Concession Order (TCO) is sought to reduce the rate of customs duty. This legislation applies to any person or entity that wishes to import the specified goods, in this case, certain wall mounting brackets. The Act facilitates applications for tariff concessions by ensuring that if the Chief Executive Officer of Customs (CEO) determines the application meets the core criteria, a TCO can be made, thereby applying a lower rate of duty. The geographic reach of this legislation is national, as it operates within the framework of the Customs Act 1901, which is a Commonwealth Act. The TCO No. 0927632, which came into force on 31 July 2009, specifies that the general rate of duty on the wall mounting brackets is 5%, but for those subject to the TCO, the rate is free. The CEO is required to consult by inviting submissions from any interested parties after accepting the TCO application as valid, although in this case, no submissions were received. The application of this legislation is further extended or restricted through subordinate instruments as necessary.
Key Provisions
The Customs Act 1901, specifically under Part XVA, enables the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCOs) (section 269F). A TCO allows for a lower rate of customs duty to be applied to certain goods (section 269P(3)). To qualify for a TCO, the goods in question must not have substitutable equivalents produced in Australia in the ordinary course of business on the date the application is lodged (section 269C). The definitions of "goods produced in Australia", "ordinary course of business" and "substitutable goods" are provided in sections 269D, 269E and 269F respectively. Once the CEO is satisfied that an application meets these criteria, they are obligated to issue a TCO (section 269C).
The obligations imposed by the Act on parties seeking a TCO include the requirement to apply to the CEO for such an order (section 269F). The CEO must then determine if the application meets the core criteria, including ensuring that no substitutable goods are produced in Australia (section 269C). The CEO must also publish a notice in the Gazette inviting submissions from any interested parties (subsection 269K(1)). If no objections are raised, the CEO must issue a TCO. The TCO applies from the date the application was lodged, and the CEO's decision must be made in writing and specify the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods (subsection 269P(3)).
Failure to comply with the requirements of the Customs Act 1901, including not adhering to the conditions for a TCO, may lead to legal consequences. Although the specific penalties for non-compliance are not detailed in the explanatory statement, the Act likely provides for both civil and criminal penalties for breaches. Such penalties could include fines or imprisonment, depending on the severity and intent behind the breach. The maximum penalties would be determined by the specific provisions of the Customs Act 1901 and any related legislation.