EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1051316
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.
Mount Cotton Pty Ltd applied for a TCO in respect of certain LED lights on 18 November 2010.
Instrument
TCO No 1051316 was made on 07 February 2011. It declares that those certain LED lights 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. 1051316 is taken to have come into force on 18 November 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 Parliament of Australia, provides a framework for the administration of customs duties, including a scheme for Tariff Concession Orders (TCOs). These orders allow for lower rates of customs duty on specified goods under certain conditions, aiming to support industries by making imported goods more competitive. The Act was amended to include these provisions to address the need for economic incentives and competitive balance in the domestic market. The Explanatory Statement for Tariff Concession Instrument No. 1051316, made on 7 February 2011, outlines the process whereby Mount Cotton Pty Ltd applied for a TCO on certain LED lights, which was subsequently approved by the Chief Executive Officer of Customs. The instrument declares that these LED lights are subject to a zero per cent duty rate, rather than the general 5 per cent rate, as no substitutable goods were produced in Australia at the time of application. The process included public consultation, with no submissions opposing the concession, and the TCO came into effect from the date of application, 18 November 2010, without retroactively affecting existing rights or imposing new liabilities.
Scope and Application
The Tariff Concession Instrument No. 1051316, made under the Customs Act 1901, applies to certain LED lights by granting tariff concessions to Mount Cotton Pty Ltd, thereby exempting these specific goods from the general customs duty. The Act, which operates at a Commonwealth level, facilitates the application of lower rates of customs duty for goods specified in Tariff Concession Orders (TCOs), provided that the goods do not fall under the exclusions listed in section 269SJ. The instrument came into force on the date the application was lodged, 18 November 2010, and benefits importers by potentially allowing them to apply for duty refunds on imports of these goods since that date. The application process requires the Chief Executive Officer of Customs to ensure no substitutable goods are produced in Australia, as per sections 269C and 269D, and involves public consultation through a Gazette notice. The TCO does not affect the rights of any person as at the date of registration and does not impose any new liabilities.
Key Provisions
The primary operative sections of this legislation include sections 269C, 269F, 269P, and 269S of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. If the CEO is satisfied that the application is valid and meets the core criteria outlined in section 269C, they must make a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. Section 269P(3) provides that if the CEO is satisfied that a TCO application meets the core criteria, they must make the order. Section 269S(1) states that a TCO is taken to have come into force on the day on which the application for the TCO was lodged.
The obligations imposed on parties by this legislation are primarily on the CEO, who must ensure that the TCO application is valid and meets the core criteria. Once these criteria are met, the CEO is required to make the TCO and declare the applicable tariff item. The CEO must also publish a notice in the Gazette inviting submissions from any person who considers there are reasons why the TCO should not be made. In the case of TCO No. 1051316, the CEO did not receive any submissions in response to the published notice.
In terms of offences and penalties, the legislation does not explicitly outline specific offences or penalties for breach of its provisions. However, the failure to comply with the requirements of the Customs Act 1901 or the Customs Tariff Act 1995 may result in civil or criminal consequences. For instance, if a person intentionally or negligently contravenes a provision of the Customs Act 1901, they may be liable to a penalty of up to 10,000 penalty units (currently AUD 1,700,000) or imprisonment for up to five years, or both, as outlined in section 285 of the Customs Act 1901. Similarly, failure to comply with the Customs Tariff Act 1995 may result in civil or criminal penalties as outlined in that Act.