EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1021386
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 modular ac dc power supplies on 12 May 2010.
Instrument
TCO No 1021386 was made on 09 August 2010. It declares that those certain modular ac dc 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. 1021386 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 Tariff Concession Instrument No. 1021386 was enacted under the Customs Act 1901 to address a specific gap in tariff concessions for certain modular ac dc power supplies. This instrument was introduced to provide a more favourable customs duty rate for these goods, aiming to stimulate their importation and usage in Australia. The instrument was developed in response to an application by Amtex Electronics, who sought a tariff concession to import these power supplies at a lower duty rate than the general 5% rate. The instrument was published in the Gazette, inviting any objections, but none were received, leading to its enactment. The policy objective of this instrument aligns with broader economic strategies to encourage the availability and affordability of certain goods in the Australian market, thereby benefiting importers and potentially end-users of these modular power supplies.
Scope and Application
The Tariff Concession Instrument No. 1021386 under the Customs Act 1901 applies to specific goods, namely certain modular ac dc power supplies, as determined by the Chief Executive Officer of Customs (CEO). This application is limited to those entities, such as Amtex Electronics, who apply for and meet the core criteria set out in the Act, particularly that no substitutable goods are produced in Australia. The geographic reach of this legislation is nationwide, as it operates under the Commonwealth's customs laws. The legislation excludes goods specified in section 269SJ of the Act, which cannot be subject to a Tariff Concession Order (TCO). The TCO does not affect existing rights or impose liabilities on any person, other than the Commonwealth, for actions taken before its registration. It is important to note that any further extensions or restrictions of the application of this Act may be made through subordinate instruments.
Key Provisions
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer (CEO) of Customs. Section 269F allows individuals or entities to apply for a TCO concerning specific goods. Once an application is deemed valid and not involving goods prohibited under section 269SJ, the CEO must determine if the application meets the core criteria outlined in sections 269B and 269C. If satisfied, the CEO is mandated to issue a TCO, as specified in section 269P(3), which declares the goods in question as eligible for a prescribed concession under Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties involved are primarily centred around the application process and compliance with the core criteria. The applicant must ensure that the goods in question are not substitutable by Australian-produced goods and are not prohibited by section 269SJ. The CEO must then publish a notice in the Gazette inviting submissions from interested parties, as required by section 269K(1), though in the case of TCO No. 1021386, no submissions were received. Once a TCO is issued, it comes into effect on the date the application was lodged, as stated in section 269S(1). Importers of the goods subject to a TCO can benefit from the concession by applying for a duty refund under paragraph 126(1)(r) of the Regulations.
Failure to comply with the provisions of the Customs Act 1901 or the conditions set out in a TCO may lead to civil or criminal consequences. While the explanatory statement does not detail specific penalties, breaches of the Customs Act can typically result in fines, imprisonment, or both, depending on the severity and intent behind the breach. The maximum penalties for contraventions of customs laws can be substantial, reflecting the importance of adherence to the regulatory framework designed to protect trade and revenue interests.