EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0931305
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.
Garmin International applied for a TCO in respect of certain mounting GPS units plastic holders on 26 August 2009.
Instrument
TCO No 0931305 was made on 13 November 2009. It declares that those certain mounting GPS units plastic holders 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. 0931305 is taken to have come into force on 26 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. 0931305 was enacted in 2009 as part of the Customs Act 1901, which provides a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. The 2009 Instrument was introduced to address the specific needs of Garmin International, which applied for tariff concessions on certain mounting GPS units plastic holders. The Act aims to facilitate lower rates of customs duty on goods where no substitutable goods are produced in Australia, thereby promoting the import of certain goods that are not locally manufactured.
The enacting body of the Customs Act 1901 is the Parliament of Australia, with the policy objective of providing a mechanism for tariff concessions to support industries that rely on imported components or goods, thus contributing to the competitive edge of Australian businesses. The Tariff Concession Order No. 0931305 was made effective from the date of application, 26 August 2009, and it declares that certain mounting GPS units plastic holders are subject to a zero rate of customs duty, as opposed to the general rate of 5%. This order does not disadvantage any person other than the Commonwealth and allows importers to apply for a refund of duty on goods imported since the effective date.
Scope and Application
The Tariff Concession Instrument No. 0931305 under the Customs Act 1901 applies to entities seeking a reduction in customs duty for specific goods by applying for a Tariff Concession Order (TCO). The Act governs the process whereby the Chief Executive Officer of Customs can approve such concessions, provided the application meets the core criteria and no substitutable goods are produced in Australia. The geographic reach of this legislation is national, affecting entities and individuals engaged in importing the specified goods within Australia. The TCO specifically pertains to Garmin International’s application for certain mounting GPS units plastic holders, which now benefit from a zero duty rate instead of the general 5% duty. The instrument does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on individuals or entities, ensuring that the concessions granted are limited to the specified goods and the entities that import them.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0931305 (referred to as TCO No. 0931305) concern the process and conditions for granting tariff concessions under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of specific goods, provided they are not listed in section 269SJ, which excludes certain goods from being subject to a TCO. The CEO must assess whether the application meets the core criteria, which is outlined in section 269C, and involves verifying that no substitutable goods were produced in Australia on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, a written order is issued under section 269P(3) to declare that the specified goods are subject to a particular item of Schedule 4 to the Customs Tariff Act 1995, resulting in a concessionary rate of customs duty.
The obligations imposed by the Act on the parties involved include the requirement for applicants to ensure that their applications for TCOs are valid and meet the specified criteria. The CEO has the duty to review these applications, determine if they meet the core criteria, and make an order if satisfied. Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit objections to the TCO if they believe it should not be granted. There are also obligations to ensure that the TCO does not adversely affect the rights of any person, except the Commonwealth, and does not impose any new liabilities.
Breaching the requirements or obligations under the Act can lead to civil or criminal consequences. For instance, if a person knowingly makes a false statement in an application for a TCO, they may be liable to a penalty of up to $22,200 or imprisonment for up to two years, or both, under section 271A of the Customs Act 1901. Furthermore, any failure to comply with the obligations set out in the Act, such as not adhering to the duty rates or the conditions of the TCO, can result in financial penalties or other legal consequences as prescribed by the relevant sections of the Act.