EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1106404
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.
Britax Automotive Equipment applied for a TCO in respect of certain warning or emergency or industrial lighting or signalling equipment on 16 February 2011.
Instrument
TCO No 1106404 was made on 03 June 2011. It declares that those certain warning or emergency or industrial lighting or signalling equipment 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. 1106404 is taken to have come into force on 16 February 2011.
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 Commonwealth Parliament, includes provisions for the creation of Tariff Concession Orders (TCOs) through Part XVA. This legislative instrument was introduced to address the need for a streamlined process to provide tariff concessions for specific imported goods that are not produced domestically, thus facilitating trade and potentially reducing costs for businesses importing such goods. The instrument allows the Chief Executive Officer of Customs to grant tariff concessions if it is determined that no substitutable goods are produced in Australia, thereby meeting the core criteria under section 269C of the Act. Tariff Concession Instrument No. 1106404, made on 3 June 2011, is an example of this mechanism, providing tariff concessions for certain warning or emergency or industrial lighting or signalling equipment, reducing the general duty rate from 5% to free. This instrument ensures that the rights of importers are beneficially affected and does not disadvantage or impose liabilities on any person other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 1106404 under the Customs Act 1901 applies to Britax Automotive Equipment in relation to certain warning or emergency or industrial lighting or signalling equipment. The Act allows for Tariff Concession Orders (TCOs) to be made by the Chief Executive Officer of Customs, providing a lower rate of customs duty for specified goods. The instrument applies specifically to goods that were subject to the application made by Britax Automotive Equipment on 16 February 2011. The TCO is applicable as of the date the application was lodged, and it effectively declares that these particular industrial lighting or signalling equipment are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a general duty rate of 5% reduced to free duty. The instrument is applicable nationally, with the CEO required to publish a notice in the Gazette inviting submissions from any interested parties, although in this instance, no submissions were received. The TCO does not affect any rights of individuals or entities, except to beneficially affect importers who can apply for a refund of duty on goods imported since the TCO came into force.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1106404 (referred to as TCO No. 1106404) under the Customs Act 1901 (the Act) pertain to the declaration of certain warning or emergency or industrial lighting or signalling equipment as goods subject to a Tariff Concession Order (TCO) (sections 269C and 269P(3)). These sections outline the process for applying for and granting TCOs, which result in a reduction of customs duty for specified goods. When Britax Automotive Equipment applied for a TCO on 16 February 2011, and the Chief Executive Officer of Customs (CEO) subsequently issued TCO No. 1106404 on 3 June 2011, it declared that certain warning or emergency or industrial lighting or signalling equipment are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free instead of the general rate of 5%.
The Act imposes several obligations and requirements on the parties involved in the TCO process. Firstly, any person may apply to the CEO for a TCO, provided the goods in question are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO (section 269F). The CEO must then determine whether the application meets the core criteria, which are set out in section 269C of the Act. The core criteria require that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)).
The CEO's decision to issue TCO No. 1106404 followed the completion of these obligations and requirements. Given that no submissions were received in response to the notice published in the Gazette, the CEO proceeded to issue the TCO, thereby fulfilling the statutory obligations. The instrument does not affect the rights of any person as at the date of registration, ensuring that it does not disadvantage or impose liabilities on any person in respect of actions taken before the registration date. Importers of the specified goods will benefit from this TCO, as they can apply for a refund of duty on goods imported since the TCO's effective date.
In terms of penalties and consequences for breach, the Act does not specify particular offences or penalties for failing to comply with the requirements of a TCO. However, the broader legal framework within which the Customs Act operates includes potential penalties for non-compliance with customs regulations. For instance, under section 251 of the Act, a person who contravenes a provision of the Act or the regulations may be liable to a penalty of up to $22,200 for an individual and up to $111,000 for a body corporate, depending on the severity of the offence. In the context of TCOs, non-compliance with the terms and conditions set out in the order could lead to civil or criminal consequences, including financial penalties or legal action, though the specifics would depend on the nature and extent of the breach.