EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1021920
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.
Targus Australia Pty Ltd applied for a TCO in respect of certain adapters and inverters chargers on 14 May 2010.
Instrument
TCO No 1021920 was made on 26 July 2010. It declares that those certain adapters and inverters 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. 1021920 is taken to have come into force on 14 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, enacted by the Australian Parliament, provides a framework for the administration of customs and excise duties, and the control of goods entering and leaving Australia. One specific mechanism under this Act is the Tariff Concession Order (TCO) system, which allows for the reduction or exemption of customs duty on certain goods. TCO No. 1021920 was introduced to address the specific issue of providing tariff concessions on certain adapters and inverters chargers, ensuring that these items are treated favourably under the customs tariff schedule. The Chief Executive Officer of Customs determined that these goods qualified for tariff concessions as no substitutable goods were produced in Australia, aligning with the core criteria set out in the Act. The policy objective of this TCO was to facilitate the importation of these goods at a reduced or free rate of duty, thereby potentially lowering costs for businesses and consumers alike.
Scope and Application
The Tariff Concession Instrument No. 1021920 under the Customs Act 1901 applies specifically to the goods for which Targus Australia Pty Ltd applied for tariff concessions, namely certain adapters and inverters chargers. The Act allows for the Chief Executive Officer of Customs to issue a Tariff Concession Order (TCO) if certain criteria are met, primarily that no substitutable goods are produced in Australia in the ordinary course of business. The TCO applies to the goods specified in the order, which in this instance are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995. The TCO reduces the rate of customs duty for these goods from the general rate of 5% to free. The application of the TCO is national, affecting the entire Commonwealth of Australia, and it is applicable to the conduct and transactions involving the importation of the specified goods. The instrument does not apply to goods that cannot be subject to a TCO as specified in section 269SJ of the Customs Act 1901. The TCO came into force on the date of the application, 14 May 2010, and does not affect the rights of any person except to beneficially impact the rights of importers who may now apply for a refund of duty on the specified goods imported since the TCO's effective date.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) relevant to Tariff Concession Orders (TCOs) are sections 269C, 269F, and 269P. Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. If the CEO is satisfied that the application meets the core criteria, which include the absence of substitutable goods produced in Australia in the ordinary course of business (section 269C), the CEO must make a written order (a TCO) declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order (section 269P(3)). In this case, the CEO made TCO No. 1021920 on 26 July 2010, declaring that certain adapters and inverters chargers are goods to which item 50 of Schedule 4 to the Tariff applies, resulting in a free rate of duty instead of the general rate of 5%.
The Act imposes several obligations and requirements on the parties involved. Firstly, an applicant must submit an application to the CEO under section 269F of the Act. The CEO then has the duty to assess the application against the core criteria specified in section 269C. If the application meets the criteria, the CEO must make a TCO as required by section 269P(3). Additionally, the CEO must publish a notice in the Gazette inviting any person who believes the TCO should not be made to submit a submission, as per subsection 269K(1). If no submissions are received, the CEO proceeds to make the TCO.
The Act also sets out potential consequences for non-compliance with its provisions. However, in this particular case, the explanatory statement does not detail specific offences, penalties, or civil/criminal consequences for breaches. The focus is on the procedural aspects of applying for and making a TCO. The TCO itself does not affect the rights of any person as at the date of registration in a way that would disadvantage them or impose liabilities for actions taken before the registration date. It is worth noting that under paragraph 126(1)(r) of the Regulations, importers can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force.
In summary, the Tariff Concession Instrument No. 1021920 under the Customs Act 1901 provides a mechanism for applying for and granting tariff concessions on certain goods. The CEO must assess applications against specific criteria and publish notices inviting submissions. The TCO in question was made on 26 July 2010, applying a free rate of duty to certain adapters and inverters chargers, and it came into force on 14 May 2010. The Act imposes procedural obligations on applicants and the CEO, with no specific penalties mentioned for non-compliance in this instance.