EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1014409
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.
Hella Australia Pty Ltd applied for a TCO in respect of certain electronic high intensity discharge xenon lamp ballasts on 24 March 2010.
Instrument
TCO No 1014409 was made on 12 August 2010. It declares that those certain electronic high intensity discharge xenon lamp ballasts 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. 1014409 is taken to have come into force on 24 March 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 Parliament of Australia, provides a framework for the regulation of customs and excise duties. Specifically, it establishes a scheme under which Tariff Concession Orders (TCOs) can be made to provide lower rates of customs duty on certain goods. The Tariff Concession Instrument No. 1014409 was introduced to address the issue of applying for tariff concessions on specific goods, in this case, electronic high intensity discharge xenon lamp ballasts, which were sought by Hella Australia Pty Ltd. The policy objective is to ensure that such concessions are granted where appropriate, promoting fair trade practices and potentially benefiting importers by allowing them to apply for a refund of duty on goods imported since the effective date of the concession. The Tariff Concession Order No. 1014409 was made on 12 August 2010, effective from 24 March 2010, when the application was lodged, and it declared that the specified goods would be subject to a zero rate of duty, down from the general rate of 5%.
Scope and Application
The Tariff Concession Instrument No. 1014409, issued under the Customs Act 1901, applies to certain electronic high intensity discharge xenon lamp ballasts, which benefit from a concession on customs duty. This concession applies to goods imported into Australia and is effective from the date the application for the tariff concession order (TCO) was lodged, in this case, 24 March 2010. The Act applies to individuals and entities seeking tariff concessions for specific goods not produced in Australia, providing them with a lower rate of customs duty. The geographic reach of this Act is national, as it operates under the Australian Customs Act 1901. The TCO does not affect any pre-existing rights or impose liabilities on any person other than the Commonwealth. However, it is explicitly noted that goods specified in section 269SJ of the Customs Act 1901, which includes those that cannot be subject to a TCO, are excluded from this concession. The application of this legislation may be further extended or restricted through subordinate instruments as deemed necessary by the Chief Executive Officer of Customs.
Key Provisions
The Tariff Concession Instrument No. 1014409, issued under the Customs Act 1901, pertains to a Tariff Concession Order (TCO) for certain electronic high intensity discharge xenon lamp ballasts (section 269F). This legislation provides for a lower rate of customs duty on specified goods when certain criteria are met. If the Chief Executive Officer (CEO) of Customs is satisfied that an application for a TCO meets the core criteria, they must issue a written order (section 269P(3)). In this case, the CEO determined that no substitutable goods were produced in Australia in the ordinary course of business, leading to the issuance of TCO No 1014409, which took effect on the date of application, 24 March 2010.
The obligations under this legislation primarily concern the CEO of Customs. Upon receiving a valid application for a TCO, the CEO must promptly publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be made (subsection 269K(1)). Additionally, the CEO must assess whether the application meets the core criteria, particularly focusing on the absence of substitutable goods produced in Australia (section 269C). In this instance, the CEO received no submissions opposing the TCO, leading to its approval.
Failure to comply with the provisions of the Customs Act 1901 can result in various consequences. While the explanatory statement does not detail specific offences or penalties, breaches of customs regulations typically involve civil or criminal penalties. The maximum penalties can include fines and, in some cases, imprisonment, depending on the severity and intent of the breach. Importers, however, benefit from this TCO by being able to apply for a refund of duty on goods imported since the effective date of the TCO (paragraph 126(1)(r) of the Regulations). The TCO itself does not impose any liabilities on any person, ensuring that the rights of individuals are not adversely affected by its implementation.