EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1047267
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 laptop cooling mats on 21 October 2010.
Instrument
TCO No 1047267 was made on 10 January 2011. It declares that those certain laptop cooling mats 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. 1047267 is taken to have come into force on 21 October 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, includes provisions for Tariff Concession Orders (TCOs) to provide relief on customs duties for certain goods. This legislation was introduced to address the need for tariff concessions for goods where no suitable Australian-made alternatives exist, thus promoting the import of goods that are not produced domestically. The Tariff Concession Instrument No. 1047267, made under the Customs Act, concerns the concession of customs duty on specific laptop cooling mats, applying from the date of the application on 21 October 2010. The policy objective is to ensure that the application of these tariff concessions does not disadvantage any person and that the rights of importers are positively impacted, allowing them to apply for refunds on duties paid before the concession took effect.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the creation and application of Tariff Concession Orders (TCOs) which provide for a lower rate of customs duty on specified goods. The Act applies to any person or entity seeking to import goods that are eligible for a tariff concession. The scope of the Act is limited to goods that are not specified in section 269SJ of the Act, which excludes certain goods from being subject to a TCO. The Act also applies to the Chief Executive Officer of Customs, who is responsible for deciding whether an application for a TCO meets the core criteria. The Act has a national reach as it is a Commonwealth Act, thus applicable across all states and territories in Australia. There are no exclusions stated in the text, but the Act does provide for the application to be restricted based on whether substitutable goods are produced in Australia. The application of the Act may be extended through subordinate instruments such as the Customs Tariff Act 1995, which specifies the prescribed items and their corresponding duty rates.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 1047267 (section 269F) allow for the Chief Executive Officer of Customs (CEO) to make a Tariff Concession Order (TCO) when a person applies for a lower rate of customs duty on goods. This provision is contingent upon the CEO being satisfied that the application does not pertain to goods specified in section 269SJ of the Customs Act 1901 and that it meets the core criteria outlined in section 269C. This means the CEO must be convinced that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The instrument in question, TCO No. 1047267, declares that certain laptop cooling mats are subject to a free rate of duty rather than the general rate of 5%, as no such substitutable goods were produced in Australia.
The Customs Act 1901 imposes certain obligations on the parties involved in the TCO process. Firstly, applicants must ensure their applications meet the criteria set out in section 269C, particularly that no substitutable goods were produced in Australia in the ordinary course of business. The CEO has the duty to evaluate the application and decide whether it meets the core criteria and, if so, to make a written TCO. The CEO is also required to publish a notice in the Gazette inviting any interested parties to submit objections or submissions regarding the TCO, as stipulated in subsection 269K(1). Importers and other stakeholders must respond to such invitations if they have concerns about the TCO.
Any failure to comply with the provisions of the Customs Act 1901 or the terms of a TCO can result in civil or criminal consequences. While the explanatory statement does not specify particular offences or penalties, breaches of the Act could lead to enforcement actions by Customs, which may include fines, penalties, or legal proceedings. The severity of these consequences can vary based on the nature and extent of the breach. It is important to note that the TCO does not affect the rights of any person as at the date of registration and does not impose any liabilities on any person in respect of anything done or omitted to be done before the date of registration.