EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0929402
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.
Mittoni Pty Ltd applied for a TCO in respect of certain cpu cooler on 11 August 2009.
Instrument
TCO No 0929402 was made on 30 October 2009. It declares that those certain cpu cooler 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. 0929402 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 Customs Act 1901 was amended to include the provision for Tariff Concession Orders (TCOs) through Part XVA, which was enacted to address the need for tariff reductions on specific goods that were not domestically produced in Australia. The Tariff Concession Instrument No. 0929402 was introduced by the Chief Executive Officer of Customs in response to an application from Mittoni Pty Ltd for a TCO on certain cpu coolers on 11 August 2009. The CEO determined that the application met the core criteria under sections 269C and 269P of the Act, and subsequently issued TCO No. 0929402 on 30 October 2009. This instrument declared that the cpu coolers in question were subject to a prescribed tariff item, resulting in a reduced duty rate from the general 5% to free duty. The TCO was designed to benefit importers by allowing them to apply for duty refunds on goods imported since the effective date of 11 August 2009, without imposing any liabilities on other parties.
Scope and Application
The Tariff Concession Order No. 0929402 under the Customs Act 1901 applies to certain CPU coolers, granting tariff concessions to these goods by the Chief Executive Officer of Customs. This instrument was made in response to an application by Mittoni Pty Ltd and applies to the goods specified in the order, provided they meet the core criteria outlined in the Customs Act. The core criteria include ensuring that no substitutable goods are produced in Australia at the time the application was lodged, and these goods are then eligible for a lower rate of customs duty as specified in Schedule 4 of the Customs Tariff Act 1995. The geographic reach of this Act is national, as it is a Commonwealth Act, applying across Australia. The Act does not specify any exclusions or exemptions other than those listed in section 269SJ of the Customs Act, which excludes certain goods from being subject to a Tariff Concession Order. The application of this Act may be extended or restricted through subordinate instruments, although no such extensions or restrictions are noted in this particular Tariff Concession Order. The order came into effect on the date the application was lodged, 11 August 2009, and does not affect any existing rights or liabilities of persons other than the Commonwealth.
Key Provisions
The Tariff Concession Instrument No. 0929402 is established under the Customs Act 1901, specifically targeting goods that may benefit from a Tariff Concession Order (TCO) (ss 269C, 269F, 269P). This instrument, made by the Chief Executive Officer of Customs (CEO), reduces the customs duty on certain goods. In this case, the instrument concerns CPU coolers, which will now be subject to a duty-free rate as per item 50 of Schedule 4 to the Customs Tariff Act 1995 (s 269P(3)). The application for this concession was lodged on 11 August 2009 and the TCO was issued on 30 October 2009. The key criterion for approval was the absence of substitutable goods being produced in Australia at the time of the application (s 269C).
Entities and individuals subject to the Act must comply with the requirements for applying for a TCO. An application must be lodged with the CEO, who must then determine if it meets the core criteria, particularly whether substitutable goods are produced in Australia (s 269C). The CEO must also publish a notice in the Gazette inviting submissions from any interested parties and consider these submissions before making a decision (s 269K(1)). In the case of Mittoni Pty Ltd’s application, no submissions were received, facilitating the swift issuance of the TCO. The rights of importers are safeguarded, with the ability to apply for duty refunds on imports since the effective date of the TCO (s 126(1)(r)).
The Customs Act imposes several obligations on applicants for a TCO. The applicant must ensure that the goods in question do not have substitutable alternatives produced in Australia. This involves providing adequate evidence to support the application (s 269C). The CEO has the responsibility to review the application, verify the information, and make a decision within the stipulated timeframe. The Act also requires the CEO to publish a notice in the Gazette, inviting public submissions on the application (s 269K(1)). These steps ensure transparency and public participation in the decision-making process.
Failure to comply with the provisions of the Customs Act regarding TCOs can lead to significant legal consequences. While the explanatory statement does not detail specific offences or penalties for non-compliance, breaches of the Act generally may result in civil or criminal penalties, including fines and imprisonment. The maximum penalties would depend on the specific nature of the breach and the relevant sections of the Act or subsidiary legislation. It is important for applicants and the CEO to adhere strictly to the Act’s requirements to avoid these consequences.