EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0936151
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.
Xtek Pty Ltd applied for a TCO in respect of certain inspection and search mirrors on 24 September 2009.
Instrument
TCO No 0936151 was made on 27 November 2009. It declares that those certain inspection and search mirrors 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. 0936151 is taken to have come into force on 24 September 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, enacted by the Australian Parliament, provides a framework under which Tariff Concession Orders (TCOs) can be issued to reduce customs duties on specified goods, provided certain criteria are met. The Customs Act 1901 was introduced to facilitate trade by allowing for the reduction of customs duties on goods where appropriate, thus promoting economic efficiency and competitiveness. In this context, the Tariff Concession Instrument No. 0936151 was introduced on 27 November 2009, in response to an application by Xtek Pty Ltd for tariff concessions on certain inspection and search mirrors. The policy objective was to ensure that if no substitutable goods were produced in Australia, the CEO of Customs could grant the concession, thus potentially benefiting importers by reducing their duty liabilities. The instrument took effect on 24 September 2009, the date the application was lodged, and did not affect any pre-existing rights or liabilities.
Scope and Application
The Tariff Concession Instrument No. 0936151, under the Customs Act 1901, applies to the specific category of inspection and search mirrors that Xtek Pty Ltd applied for on 24 September 2009. The instrument was made on 27 November 2009, and it was effective from the date of the application, 24 September 2009. The act applies to goods that are not produced in Australia in the ordinary course of business and for which a Tariff Concession Order (TCO) can be issued by the Chief Executive Officer of Customs. The act is part of the Commonwealth's regulatory framework and affects entities such as importers and manufacturers of goods subject to the TCO. The instrument specifies that the general rate of duty on these mirrors is 5%, but the TCO reduces this to free, provided no substitutable goods are produced in Australia. The act does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person in relation to actions taken before the TCO was registered.
Key Provisions
The Customs Act 1901 (the Act) enables the Chief Executive Officer of Customs (the CEO) to issue Tariff Concession Orders (TCOs) under section 269F, which can reduce the customs duty on certain goods. Specifically, section 269C stipulates that a TCO application is valid if no substitutable goods were produced in Australia on the date the application was lodged, as defined by section 269D (goods produced in Australia), section 269E (ordinary course of business), and section 269F (substitutable goods). When the CEO is satisfied that the application meets these core criteria, they must issue a written TCO, as outlined in section 269P(3). This process was followed in the case of TCO No. 0936151, which applies to certain inspection and search mirrors, declaring them subject to a specific item in the Customs Tariff Act 1995, resulting in a duty-free rate.
Entities or individuals subject to the Act must adhere to several obligations when applying for or using a TCO. Firstly, as per section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties once an application is deemed valid. The CEO is then required to consider any submissions received before deciding whether to issue the TCO. Additionally, the application must not pertain to goods specified in section 269SJ of the Act, which are ineligible for TCOs. In the case of TCO No. 0936151, no submissions were received, and the CEO was satisfied that the application met the core criteria, leading to the issuance of the TCO.
Breaches of the Act's provisions can result in various civil or criminal consequences. Although specific penalties are not detailed in the provided text, it is standard for non-compliance with customs regulations to result in fines or other penalties. For instance, misrepresenting facts in an application or failing to adhere to the terms of a TCO could lead to legal action against the offending party. The severity of penalties would depend on the nature and extent of the breach, with potential outcomes including financial penalties or other legal sanctions.
The commencement date of a TCO, as per section 269S(1), is the date the application was lodged. This means that TCO No. 0936151 is considered effective from 24 September 2009. Importantly, the Act ensures that the rights of any person (other than the Commonwealth) are not adversely affected by the TCO concerning actions taken before the registration date. Consequently, importers of goods subject to the TCO can apply for duty refunds on goods imported since the effective date, without incurring any new liabilities. This provision aims to protect the interests of those who have already engaged in import activities prior to the TCO's implementation.