EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1006743
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.
Homedics Australia applied for a TCO in respect of certain electromagnetic induction chargers battery on 05 February 2010.
Instrument
TCO No 1006743 was made on 30 April 2010. It declares that those certain electromagnetic induction battery 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. 1006743 is taken to have come into force on 05 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 Tariff Concession Instrument No. 1006743 was enacted under the Customs Act 1901 to address the need for tariff concessions on specific goods. This legislation allows for the reduction or exemption of customs duties on certain goods not produced domestically, thereby promoting fair competition and access to affordable goods for consumers. The Customs Act 1901 provides a framework for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) when certain criteria are met. In this case, Homedics Australia applied for a TCO on electromagnetic induction chargers battery, which was subsequently approved as no substitutable goods were produced in Australia at the time of application. The instrument came into force on the date of the application, 5 February 2010, and provided a general duty rate of 5% on these goods, which was reduced to free under the TCO. The policy objective was to facilitate the import of these goods without imposing additional liabilities or disadvantaging any party.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which apply lower rates of customs duty to specified goods. This Act applies to any person or entity that imports or wishes to import goods into Australia and seeks to avail themselves of the benefits of a reduced tariff rate under a TCO. The geographic and jurisdictional reach of the Act is national, as it pertains to the importation of goods into Australia and operates within the framework of the Commonwealth. The Act excludes certain goods specified in section 269SJ, which cannot be subject to a TCO, and requires that a TCO application meets core criteria, such as the absence of substitutable goods produced in Australia. Subordinate instruments, such as regulations, may further define terms or extend the application of the Act, but the primary Act itself outlines the core legislative framework. The Tariff Concession Instrument No. 1006743, for example, specifies the application of a TCO to certain electromagnetic induction battery chargers, setting their duty rate to free, effective from the date of the application.
Key Provisions
The Tariff Concession Instrument No. 1006743, under the Customs Act 1901, provides a tariff concession for certain electromagnetic induction battery chargers. Section 269F of the Act allows for the application of Tariff Concession Orders (TCOs) by individuals or entities to the Chief Executive Officer of Customs (CEO). If the CEO is satisfied that the application meets the core criteria set out in section 269C of the Act, a TCO can be issued. This instrument, specifically TCO No. 1006743, was applied for by Homedics Australia on 05 February 2010 and was made on 30 April 2010, applying a zero rate of duty instead of the general 5% rate for these goods.
The Act imposes specific obligations on both the applicant and the CEO. For the applicant, the primary obligation is to ensure that the application meets the criteria set out in section 269C of the Act, particularly that no substitutable goods are produced in Australia on the day the application is lodged. The CEO, on the other hand, is required to assess the application against these criteria and, if satisfied, to issue a TCO. Additionally, as per subsection 269K(1) of the Act, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections to the TCO. In this case, the CEO did not receive any submissions against the TCO No. 1006743.
Failure to comply with the provisions of the Customs Act 1901 can lead to various consequences. Under the Act, breaches of the TCO provisions may result in both civil and criminal penalties. The maximum penalties for contravening the Act can include substantial fines and, in some cases, imprisonment. Specifically, section 278 of the Act outlines the penalties for offences, which may extend to a fine of up to 10,000 penalty units or imprisonment for up to five years, or both, for serious offences. Importers or entities failing to comply with the terms of the TCO may face these penalties, highlighting the importance of adherence to the legislative requirements.