EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1004776
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 applied for a TCO in respect of certain mobile phone and or programmed audio visual machine chargers on 27 January 2010.
Instrument
TCO No 1004776 was made on 09 April 2010. It declares that those certain mobile phone and or programmed audio visual machine chargers 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. 1004776 is taken to have come into force on 27 January 2010.
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. 1004776, enacted under the Customs Act 1901, was introduced to address the need for tariff concessions on specific goods. This Instrument was made on 09 April 2010 and came into force on 27 January 2010, the date on which Crest Electronics applied for the concession. The Customs Act 1901 provides a scheme for Tariff Concession Orders (TCOs), which allow for a lower rate of customs duty on goods that meet certain criteria. In this case, the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, thereby satisfying the core criteria for the concession. The policy objective was to ensure that the application of the concession would not disadvantage any person and would instead benefit importers by potentially allowing them to apply for a refund of duty on goods imported since the effective date of the TCO.
Scope and Application
The Customs Act 1901, as supplemented by Tariff Concession Instrument No. 1004776, applies to any entity seeking tariff concession orders (TCO) for specified goods that are imported into Australia. This Act is applicable to the Commonwealth and provides a mechanism by which the Chief Executive Officer of Customs can grant tariff concessions on certain imported goods. The TCO in question pertains to mobile phone and programmed audio-visual machine chargers, with the instrument declaring that these goods are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, effectively applying a zero duty rate. The Act excludes certain goods from being subject to TCOs as outlined in section 269SJ of the Customs Act 1901. The instrument itself does not explicitly mention any exclusions beyond those outlined in the primary Act, and the CEO's decision to grant a TCO hinges on the absence of substitutable goods being produced in Australia in the ordinary course of business. The commencement of the TCO aligns with the date the application was lodged, and the CEO is required to publish a notice in the Gazette to invite any interested parties to submit objections to the TCO, although in this case, no objections were received. The Act ensures that the rights of persons other than the Commonwealth are not adversely affected by the TCO, and importers of the affected goods may apply for a refund of duty paid before the TCO came into effect.
Key Provisions
The primary operative sections of this legislation include sections 269C, 269F, and 269P of the Customs Act 1901. Section 269F allows an applicant to submit an application to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of certain goods. If the CEO is satisfied that the application is valid and meets the core criteria outlined in section 269C, they must make a written order (section 269P(3)). The core criteria include the condition that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The TCO declares that the goods in question are subject to a prescribed rate of duty, which in this case is free, as opposed to the general rate of duty which is 5%.
The obligations and requirements imposed by this legislation on the parties involved are primarily centred around the application process and the criteria for the TCO. The CEO is obligated to assess applications against the core criteria specified in section 269C. Once an application is accepted as valid, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections or reasons why the TCO should not be made (subsection 269K(1)). In the case of TCO No. 1004776, no submissions were received. The CEO's duty to make a TCO is contingent upon their satisfaction that the application meets the core criteria and no substitutable goods were produced in Australia.
In terms of penalties and consequences for breaches, the Customs Act 1901 does not explicitly detail the penalties for non-compliance with TCOs. However, general provisions in the Act imply that failure to comply with the terms of a TCO, or any other provision of the Act, could result in civil or criminal penalties. The specific penalties would depend on the nature and severity of the breach and would be subject to the broader provisions of the Customs Act 1901 and associated regulations. It is important to note that the TCO itself does not impose any liabilities on any person, including importers, for actions taken before the date of registration of the TCO.