EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0936529
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 adjustable wall mount appliance brackets on 28 September 2009.
Instrument
TCO No 0936529 was made on 11 December 2009. It declares that those certain adjustable wall mount appliance 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. 0936529 is taken to have come into force on 28 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 Commonwealth Parliament, establishes a framework within which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This Act was introduced to facilitate a more streamlined process for reducing customs duties on specific goods, thus promoting trade and economic growth by providing relief where applicable. Under section 269F of the Act, individuals or entities can apply for a TCO if the goods in question are not excluded by section 269SJ and meet the core criteria outlined in section 269C, such as the absence of substitutable goods produced in Australia. The policy objective of the Act is to encourage trade by reducing the duty burden on certain goods, thereby making imported products more competitive within the domestic market. The Tariff Concession Instrument No. 0936529, made on 11 December 2009, is an example of this mechanism in action, providing a tariff concession for adjustable wall mount appliance brackets, resulting in a reduction of duty from 5% to free.
Scope and Application
The Tariff Concession Instrument No. 0936529, made under the Customs Act 1901, applies to the specific goods for which Crest Electronics Pty Ltd applied, namely certain adjustable wall mount appliance brackets. The instrument is applicable to the industry involved in the production or importation of these goods, and it governs the customs duty rates applicable to these goods. Geographically, the application of this instrument is within the Commonwealth of Australia, as it pertains to the importation of goods into Australia and the application of customs duties as stipulated by the Customs Act. The instrument excludes any goods specified in section 269SJ of the Customs Act, which cannot be subject to a Tariff Concession Order (TCO). Additionally, the instrument does not disadvantage any person or impose liabilities on any person in respect of actions taken before the date of the instrument's registration. The application of this instrument can be extended or restricted through subordinate instruments as outlined in the Customs Regulations.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 0936529 under the Customs Act 1901, involve the process of applying for and granting Tariff Concession Orders (TCOs). Section 269F allows an individual to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the CEO determines that the application is not for goods specified in section 269SJ, they must decide if the application meets the core criteria outlined in section 269C. This involves assessing whether, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If these criteria are met, the CEO is required to issue a written order under section 269P(3), declaring that the goods in question are subject to a specified tariff concession.
The Act imposes several obligations on the parties involved. The CEO of Customs has the duty to decide whether an application for a TCO meets the core criteria, which includes verifying that no substitutable goods were produced in Australia on the day the application was lodged. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be granted, as per subsection 269K(1). If no submissions are received, the CEO proceeds to issue the TCO. Importers of the goods subject to the TCO can apply for a refund of duty under paragraph 126(1)(r) of the Regulations for goods imported since the day the TCO is taken to have come into force.
Under the Customs Act 1901, breaches of the provisions regarding TCOs may result in various penalties and consequences. While the specific penalties are not detailed in the explanatory statement, general penalties for breaches of the Customs Act can include substantial fines and, in severe cases, imprisonment. The exact penalties would depend on the nature and severity of the breach. Additionally, any failure to comply with the requirements set out in the Act, such as not properly applying for a TCO or providing false information, could lead to civil or criminal consequences. The Act ensures that the TCO does not affect the rights of any person other than the Commonwealth in respect of actions taken before the TCO’s registration date.