EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1005877
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.
Accusound Australia applied for a TCO in respect of certain home theatre loudspeakers on 02 February 2010.
Instrument
TCO No 1005877 was made on 16 April 2010. It declares that those certain home theatre loudspeakers 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. 1005877 is taken to have come into force on 02 February 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 Customs Act 1901, enacted by the Australian Parliament, provides for the regulation of customs and excise duties and the administration of related laws. The Act establishes a framework under which Tariff Concession Orders (TCOs) can be made to apply lower rates of customs duty to certain goods. This mechanism aims to support Australian industries by providing tariff relief where appropriate. The Tariff Concession Instrument No. 1005877, issued under the Customs Act, was enacted to address the specific issue of applying tariff concessions to certain home theatre loudspeakers. This was achieved by the Chief Executive Officer of Customs, who determined that no substitutable goods were produced in Australia, thus meeting the core criteria for the concession. The policy objective is to encourage the import of these goods by reducing their customs duty, thereby benefiting importers and potentially stimulating demand in the Australian market.
Scope and Application
The Tariff Concession Instrument No. 1005877 applies to certain home theatre loudspeakers imported into Australia, with the primary focus being on the application of reduced customs duty rates under the Customs Act 1901. This Act, which operates at the Commonwealth level, allows for the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, provided the goods in question are not specified as ineligible under section 269SJ. The legislation is intended to benefit entities such as Accusound Australia by potentially reducing the duty on specific imported goods, thereby promoting competitive pricing and market accessibility. The application of this Instrument is triggered when the CEO determines that the goods in question are not substitutable by products manufactured within Australia, as outlined in section 269C. Additionally, the instrument’s scope is further defined through its connection to Schedule 4 of the Customs Tariff Act 1995, which specifies the applicable duty rates. The commencement of this TCO aligns with the date of the application, 02 February 2010, and does not retroactively affect any pre-existing rights or liabilities of parties other than the Commonwealth.
Key Provisions
The Tariff Concession Instrument No. 1005877 is an instrument made under section 269F of the Customs Act 1901, which enables the Chief Executive Officer of Customs (CEO) to issue a Tariff Concession Order (TCO) for specific goods. In this case, the instrument applies to certain home theatre loudspeakers and was made on 16 April 2010 (section 269P(3)). The instrument declares that these loudspeakers are subject to a free rate of customs duty, as opposed to the general rate of 5% (section 269P(3)).
The process of applying for a TCO under section 269F requires that the applicant satisfies core criteria, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). The CEO is required to publish a notice in the Gazette inviting submissions from any interested parties, though no submissions were received in response to this particular application (subsection 269K(1)). Once the CEO is satisfied that the application meets the core criteria, they must issue a written TCO (section 269P(3)).
The obligations imposed by the Act on the CEO include ensuring that the application for a TCO is not in respect of goods specified in section 269SJ, which lists goods that cannot be subject to a TCO, and determining if the application meets the core criteria as per section 269C. The CEO must also publish a notice in the Gazette inviting submissions if a TCO application is accepted as valid (subsection 269K(1)). Additionally, the CEO must make a written TCO if the application meets the core criteria (section 269P(3)).
For breach of any provision of the Customs Act 1901, the Act may impose civil or criminal penalties. However, the Explanatory Statement does not specify the maximum penalties for breaches related to TCOs. It is important to note that 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 (subsection 269S(1)). This ensures that the rights of importers will be beneficially affected and that the TCO does not impose any liabilities on any person.