EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1021385
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.
Amtex Electronics applied for a TCO in respect of certain dc laboratory power supplies on 12 May 2010.
Instrument
TCO No 1021385 was made on 06 September 2010. It declares that those certain dc laboratory power supplies 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. 1021385 is taken to have come into force on 12 May 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 was enacted to provide for the regulation of customs and excise matters in Australia, and it was introduced to address the need for a structured and efficient system for managing customs duties and related processes. The Customs Act establishes a framework under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs to provide lower rates of customs duty on certain goods. This mechanism is intended to support economic activities by reducing the cost of imported goods where no suitable domestic alternatives exist. Enacted by the Australian Parliament, the Act aims to facilitate trade while ensuring that customs duties are effectively managed and collected.
One specific instance of this legislative intent is reflected in Tariff Concession Instrument No. 1021385, which was made under the Customs Act in 2010. This instrument was introduced to provide tariff concessions for certain dc laboratory power supplies, following an application by Amtex Electronics. The policy objective in this case was to reduce the customs duty on these specific goods from the general rate of 5% to free, thereby benefiting importers and potentially stimulating related economic activities by making the goods more affordable.
Scope and Application
The Tariff Concession Instrument No. 1021385 under the Customs Act 1901 applies to specific goods that are the subject of a Tariff Concession Order (TCO). This particular instrument applies to certain DC laboratory power supplies that Amtex Electronics sought a TCO for, following the Act's provisions which allow for applications to be made by any person for a TCO in respect of goods. The instrument has a national jurisdictional reach as it operates under the Commonwealth of Australia and affects the importation of goods covered by the TCO. The application of the TCO is contingent on the goods not being substitutable by any goods produced in Australia in the ordinary course of business, as outlined in the Act, and the CEO's determination that the application meets the core criteria set forth in the legislation. The TCO provides a concession by reducing the rate of customs duty on the specified goods from the general rate of 5% to free, provided the goods are imported in accordance with the instrument's conditions. The TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person in respect of actions taken before its effective date.
Key Provisions
The Customs Act 1901, specifically under Part XVA, outlines the framework for the creation of Tariff Concession Orders (TCOs), as provided in section 269F. The primary focus is on the concession of customs duty rates for certain goods. The CEO of Customs can make a TCO if an application is submitted and meets the core criteria as stipulated in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The terms 'substitutable goods', 'goods produced in Australia', and 'ordinary course of business' are further defined in sections 269D, 269E, and 269B respectively.
The obligations under this legislation for the parties involved are quite clear. An applicant must ensure that the goods for which the TCO is sought do not have substitutable goods produced domestically. The CEO has the responsibility to review applications and determine whether they meet the core criteria. If satisfied, the CEO must then issue a written TCO. This process is transparent, with the CEO required to publish a notice in the Gazette inviting any interested parties to submit any objections against the making of the TCO, as per section 269K(1). The TCO is deemed to come into force on the date the application was lodged, as stated in section 269S(1).
Non-compliance with the provisions of the Customs Act 1901 can lead to significant consequences. Although the explanatory statement does not explicitly mention offences, penalties, or consequences, it is reasonable to infer that breaches of the duty provisions or misrepresentations in TCO applications could be subject to the general enforcement provisions of the Act, which may include fines or imprisonment. The specific penalties would depend on the nature and severity of the breach, as detailed in other parts of the Act or related legislation. It is also worth noting that the TCO does not affect the rights of any person except the Commonwealth and does not impose liabilities on any person in respect of actions taken before the registration of the TCO.