EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1052204
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.
Lincoln Sentry applied for a TCO in respect of certain ac power outlets and/or multimedia ports on 29 November 2010.
Instrument
TCO No 1052204 was made on 28 February 2011. It declares that those certain ac power outlets and/or multimedia ports 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. 1052204 is taken to have come into force on 29 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 imposition of customs duty on imported goods. One of the mechanisms within this framework is the Tariff Concession Order (TCO), which allows for a lower rate of customs duty on specified goods. The Customs Act 1901 was amended to introduce the scheme for TCOs to address the need for tariff relief for certain goods where there is no local production in Australia. The objective of this legislative instrument is to facilitate trade by reducing the cost of imported goods, thereby making them more competitive in the domestic market and benefiting consumers. The process for granting a TCO involves an application to the Chief Executive Officer of Customs, who must determine whether the application meets the core criteria, including the absence of substitutable goods produced in Australia. Upon meeting these criteria, a TCO is issued, effectively reducing the customs duty on the specified goods.
Scope and Application
The Customs Act 1901, under Part XVA, provides a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which allow for lower customs duty rates on certain goods. The scope of this Act applies to any person or entity seeking a reduction in customs duty on goods that are not specified as ineligible under section 269SJ of the Act. The application process requires that the goods in question are not substitutable with any that are produced in Australia in the ordinary course of business, as defined by sections 269C, 269D, 269E, and 269F of the Act. Once the CEO determines that the application meets the core criteria, a TCO is issued, reducing the duty on the specified goods to zero, effective from the date of application lodging. The TCO does not affect any pre-existing rights or impose new liabilities on non-Commonwealth entities. The CEO is mandated to publish notices in the Gazette to invite submissions on the TCO application, although in the case of TCO No. 1052204, no submissions were received. The TCO is applicable nationally, as per the provisions of the Customs Act 1901, which operates across the Commonwealth of Australia.
Key Provisions
The main sections of Tariff Concession Instrument No. 1052204, under the Customs Act 1901, pertain to the granting of Tariff Concession Orders (TCOs). Section 269F allows an individual to apply to the Chief Executive Officer of Customs (CEO) for a TCO for certain goods, provided they do not fall under the exclusions outlined in section 269SJ. The CEO must then determine if the application meets the core criteria, specifically if no substitutable goods were produced in Australia on the day the application was lodged, as outlined in section 269C. Once the CEO is satisfied that the application meets these criteria, they are required to issue a TCO under section 269P(3), specifying the particular item from Schedule 4 of the Customs Tariff Act 1995 applicable to the goods in question.
The obligations imposed by this legislation on the parties involved are primarily administrative. The CEO must ensure that all TCO applications are assessed against the criteria set forth in the Act. This involves verifying that the goods in question are not already being produced in Australia and that they do not have substitutable alternatives. The CEO must also publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be granted, as mandated by subsection 269K(1). The applicant, in this case, Lincoln Sentry, must submit a valid application that meets the criteria specified in the Act to obtain the concession.
Failure to comply with the requirements of this legislation can result in civil and criminal consequences. While the Explanatory Statement does not detail specific offences, breaches of the Customs Act 1901 can lead to penalties under the Act, which include fines and imprisonment. For instance, providing false or misleading information in an application could lead to a fine under section 237 of the Act, which imposes a penalty of up to $22,200 for individuals and up to $111,000 for corporations. Furthermore, the Act allows for prosecution in the case of fraudulent or wilful behaviour, which could result in additional penalties as determined by the court.
In summary, Tariff Concession Instrument No. 1052204 allows for the concession of customs duties on certain goods through the issuance of TCOs, provided the goods meet specific criteria and no substitutable goods are produced in Australia. The CEO has the responsibility of assessing applications and issuing TCOs where appropriate, while applicants must ensure their submissions comply with the legislative requirements. Non-compliance can result in significant civil and potentially criminal penalties.