EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0938247
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.
Teac Australia applied for a TCO in respect of certain digital video recorder on 12 October 2009.
Instrument
TCO No 0938247 was made on 04 January 2010. It declares that those certain digital video recorder 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. 0938247 is taken to have come into force on 12 October 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 enacted by the Parliament of Australia to regulate the importation and exportation of goods. It provides a framework for the imposition and collection of customs duty and the facilitation of trade. The Tariff Concession Instrument No. 0938247, made under the authority of the Customs Act 1901, addresses the gap in providing tariff concessions for specific goods that are not produced in Australia, thereby encouraging trade and investment. This instrument was developed to respond to an application by Teac Australia for a tariff concession on certain digital video recorders, resulting in a tariff concession order which was published in the Gazette on 4 January 2010. The policy objective is to provide tariff relief for goods that are not domestically produced, facilitating access to these goods for consumers and businesses.
Scope and Application
The Tariff Concession Instrument No. 0938247 under the Customs Act 1901 applies to goods, specifically certain digital video recorders, and the entity that applied for the concession, Teac Australia. This legislation facilitates tariff concessions for goods not produced in Australia, thereby potentially lowering customs duties. The application of the Act is limited to entities and goods that meet the specified criteria, ensuring that the concession only benefits those for whom substitutable goods are not produced domestically. Geographically, the application of this Act is national, as it pertains to the Commonwealth of Australia, with the concessions applicable across all states and territories. However, the Act explicitly excludes goods that are specified in section 269SJ, which details those goods ineligible for tariff concessions. The scope of the Act can be further extended or refined through subordinate instruments, which may include detailed regulations or guidelines issued by the Chief Executive Officer of Customs. The commencement date of the tariff concession is the day the application was lodged, and it does not affect any pre-existing rights or liabilities of parties other than the Commonwealth.
Key Provisions
The Tariff Concession Instrument No. 0938247, as referenced in section 269F of the Customs Act 1901, outlines the process by which Tariff Concession Orders (TCOs) can be made. An application for a TCO can be submitted by any person to the Chief Executive Officer of Customs (CEO), who then assesses the application against the criteria set out in sections 269C and 269P of the Act. If the CEO determines that the application meets the core criteria, a TCO will be issued, effectively granting a lower rate of customs duty on the specified goods. For the particular case of Teac Australia's application regarding certain digital video recorders, the CEO issued TCO No. 0938247 on 4 January 2010, applying item 50 of Schedule 4 to the Customs Tariff Act 1995, which reduced the duty rate from 5% to free.
The obligations imposed by the Customs Act 1901 on the parties involved are centred around the application and assessment processes for TCOs. The CEO must ensure that any TCO application is assessed against the core criteria and that if the application meets these criteria, a written TCO order is issued. The CEO is also required to publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting any submissions from interested parties. If no submissions are received, the CEO proceeds to issue the TCO. In the case of Teac Australia's application, the CEO was not provided with any submissions opposing the TCO, and thus, the order was issued on the basis of the application's compliance with the criteria.
There are no direct offences, penalties, or civil/criminal consequences stipulated within the Act for breaches related to TCOs, as the focus is on the application and issuance process. However, any failure by the CEO to properly assess an application or to publish the required notice in the Gazette could potentially lead to legal challenges regarding the validity of the TCO. Additionally, if the TCO is found to have been incorrectly issued, the CEO may need to retract it, which could result in adjustments to the duties already paid by importers for the affected goods.
Overall, the Tariff Concession Instrument No. 0938247 and the relevant sections of the Customs Act 1901 provide a structured framework for the application, assessment, and issuance of TCOs. The obligations on the CEO and the potential implications for importers are clearly defined, with the primary aim of facilitating duty concessions for goods that meet the specified criteria.