EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1031936
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.
Sony Australia applied for a TCO in respect of certain 3d television screen viewing glasses on 13 July 2010.
Instrument
TCO No 1031936 was made on 20 September 2010. It declares that those certain 3d television screen viewing glasses 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. 1031936 is taken to have come into force on 13 July 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. 1031936, made under the Customs Act 1901, was introduced to address the specific issue of granting tariff concessions for certain goods that are not produced in Australia and for which no suitable substitutes are available domestically. Enacted by the Parliament of Australia, this instrument aims to provide relief from customs duty for goods that meet specific criteria, thereby facilitating access to these goods for consumers and businesses while ensuring that local production is not adversely affected. The policy objective is to support the importation of goods that are not produced in Australia and cannot be replaced by locally manufactured alternatives, thus maintaining a balance between supporting international trade and protecting domestic industries. This legislative approach ensures that the importation of non-substitutable goods is encouraged without imposing undue burdens on local producers.
Scope and Application
The Tariff Concession Instrument No. 1031936 under the Customs Act 1901 applies to individuals or entities that seek tariff concessions for specific goods. The act applies to goods that are not listed in section 269SJ, which specifies goods that are ineligible for tariff concessions. The instrument is concerned with the concession of customs duty for certain 3D television screen viewing glasses, which are subject to a free rate of duty rather than the general rate of 5%. The legislation is enacted at the Commonwealth level and applies nationally, affecting all importers of the specified goods within Australia. The instrument does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on persons in respect of actions taken before the commencement of the TCO. The CEO of Customs has the authority to extend or restrict the application of the Act through subordinate instruments, such as the Regulations.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 1031936 under the Customs Act 1901 (section 269P(3)) involve the declaration of a tariff concession order (TCO) for certain 3D television screen viewing glasses. When the Chief Executive Officer of Customs (CEO) is satisfied that the application for a TCO meets the core criteria, the CEO must make a written order that specifies the goods to which the concession applies (section 269C, 269B, 269D, 269E). In this instance, the CEO was satisfied that the application met the core criteria, as no substitutable goods were produced in Australia, and thus the TCO was issued. The TCO specifies that the general rate of duty on these goods is reduced to free, down from the standard 5% rate (section 269P(3)). The TCO came into force on the date the application was lodged, which was 13 July 2010 (subsection 269S(1)).
The obligations imposed on parties by this legislation include the requirement for any person seeking a tariff concession to apply to the CEO and provide sufficient information to satisfy the core criteria. The CEO must then determine if the application meets the criteria and, if satisfied, issue a TCO. Additionally, the CEO is required to publish a notice in the Gazette inviting any interested party to submit reasons why the TCO should not be made. In this case, no submissions were received, and the TCO was issued as per the application (subsection 269K(1)). Importers benefit from this concession as they can apply for a refund of duty on goods imported since the date the TCO is deemed to have come into force.
In terms of consequences for non-compliance, the legislation does not explicitly state civil or criminal penalties for breaching the terms of a TCO or failing to comply with the application process. However, general duties and obligations under the Customs Act 1901, including penalties for incorrect declarations or fraud, may apply. The Act and associated regulations provide for a range of penalties, including fines and imprisonment, for breaches such as providing false information or evading duty. The maximum penalties would depend on the specific nature and severity of the breach, as outlined in the relevant sections of the Customs Act 1901 and associated regulations.