EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0929226
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.
Artcraft Superlux applied for a TCO in respect of certain self ballasted fluorescent downlights on 11 August 2009.
Instrument
TCO No 0929226 was made on 30 October 2009. It declares that those certain self ballasted fluorescent downlights 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. 0929226 is taken to have come into force on 11 August 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. 0929226 was enacted in 2009 under the Customs Act 1901. This legislation was introduced to address the need for a streamlined process through which businesses could apply for tariff concessions on specific imported goods, thereby facilitating more efficient trade and potentially lowering costs for importers. The instrument was created to provide a mechanism for the Chief Executive Officer of Customs to grant tariff concessions where certain criteria were met, particularly focusing on the non-production of substitutable goods within Australia. This measure was intended to support businesses by reducing the customs duty on specific imported goods, thus making imported products more competitive in the Australian market. The policy objective was to ensure that the process for granting tariff concessions was both transparent and accessible, encouraging fair trade practices while also supporting economic efficiency.
Scope and Application
The Customs Act 1901, through the Tariff Concession Instrument No. 0929226, applies to any entity seeking tariff concessions on goods imported into Australia. The Act facilitates the application process for Tariff Concession Orders (TCOs) by allowing the Chief Executive Officer of Customs to consider applications from individuals or businesses. The scope of the Act is focused on ensuring that the application for tariff concessions is valid, meaning that the goods in question are not specified in section 269SJ as ineligible for concession and that no substitutable goods are produced in Australia at the time of application. The Act's jurisdictional reach extends to the entire Commonwealth of Australia, ensuring that the process and outcomes are uniform across the nation. However, the Act excludes certain goods from being subject to TCOs, specifically those outlined in section 269SJ, and imposes no liabilities on individuals or entities other than the Commonwealth. The application of the Act can be extended or modified through subordinate instruments, thereby allowing for flexibility in the administration of tariff concessions.
Key Provisions
The Customs Act 1901 provides for the application of Tariff Concession Orders (TCOs) to goods, which effectively lowers the rate of customs duty on those goods. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO for specified goods. If the CEO is satisfied that the application meets the core criteria outlined in section 269C and does not relate to goods specified in section 269SJ, a TCO may be made. 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. For the purposes of this assessment, 'substitutable goods' means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use to which the goods the subject of the application can be put. If the CEO is satisfied that the application meets these criteria, they must make a written order (a TCO) that declares 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 CEO has obligations under the Customs Act 1901 to consider applications for TCOs. If the CEO is satisfied that a TCO application meets the core criteria, they must make a written order declaring the goods to which the TCO applies. The CEO must also, as soon as practicable after accepting a TCO application as a valid application, 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. This provides an opportunity for interested parties to voice any objections to the TCO. The CEO must then consider these submissions before deciding whether to make the TCO. In this case, the CEO did not receive any submissions in response to the Gazette notice.
Breach of the Customs Act 1901 can result in civil and criminal penalties. Section 275 of the Act provides that a person who contravenes a provision of the Act is liable to a penalty of up to 10,000 penalty units or, in the case of a corporation, up to 50,000 penalty units. A penalty unit is currently equivalent to AUD 222. Offence provisions within the Act may also result in criminal prosecution, with penalties varying depending on the offence. However, these provisions are not specifically mentioned in relation to TCOs, and it is assumed that breaches would be dealt with under the general offence provisions of the Act.