EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1109122
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.
Smith Light Pty Ltd applied for a TCO in respect of certain non ceramic portable lights on 16 March 2011.
Instrument
TCO No 1109122 was made on 6 June 2011. It declares that those certain non ceramic portable 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. 1109122 is taken to have come into force on 16 March 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 Tariff Concession Instrument No. 1109122, enacted in 2011, is a legislative measure designed to address the need for tariff concessions on certain imported goods under the Customs Act 1901. The instrument facilitates the application process for Tariff Concession Orders (TCOs) as outlined in Part XVA of the Act, where the Chief Executive Officer of Customs can grant a lower rate of customs duty on specified goods. This process was initiated by Smith Light Pty Ltd's application for a TCO on certain non-ceramic portable lights, resulting in Instrument TCO No. 1109122, which was published in the Gazette and came into effect on 16 March 2011. The policy objective of this instrument is to ensure that the application process for tariff concessions is transparent and allows for public submissions, thereby providing an avenue for stakeholders to voice their concerns regarding the concession of duties on specific goods. This approach ensures that the interests of all parties are considered, while also facilitating smoother trade operations by reducing the duty on eligible imported goods.
Scope and Application
The Tariff Concession Instrument No. 1109122 under the Customs Act 1901 applies to specific non-ceramic portable lights as identified by Smith Light Pty Ltd. The instrument was issued by the Chief Executive Officer of Customs following an application by Smith Light Pty Ltd on 16 March 2011, and it came into force on the same date. The instrument declares that the specified non-ceramic portable lights are subject to a lower rate of customs duty, specifically item 50 of Schedule 4 to the Customs Tariff Act 1995, which sets the duty at free. This concession applies only to goods that are not substitutable by any goods produced in Australia in the ordinary course of business, as defined under sections 269C and 269D of the Customs Act 1901. The instrument does not apply to goods specified in section 269SJ of the Act, which cannot be subject to a tariff concession order. Importantly, the instrument does not affect any existing rights of persons other than the Commonwealth and does not impose any liabilities on anyone. It is effective nationwide and is subject to the conditions and criteria outlined in the Customs Act 1901 and the Customs Tariff Act 1995.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1109122 are sections 269C, 269P(3), and 269SJ of the Customs Act 1901. Section 269C specifies the core criteria that an application for a Tariff Concession Order (TCO) must meet, which is that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P(3) mandates that if the Chief Executive Officer of Customs (CEO) is satisfied that these core criteria are met, they must make a written order (a TCO) applying a lower rate of customs duty to the goods in question. Section 269SJ lists the goods that cannot be subject to a TCO, ensuring that only eligible goods benefit from the tariff concessions.
The obligations imposed by the Act on the parties involved include the requirement for the CEO to evaluate the application against the core criteria specified in section 269C. If the CEO is satisfied that the application meets these criteria, they must publish a notice in the Gazette inviting any interested parties to lodge submissions against the TCO, as outlined in subsection 269K(1). Smith Light Pty Ltd, the applicant, must ensure their application is valid and supported by necessary evidence to meet the criteria. Additionally, the CEO must adhere to the procedural requirement of subsection 269S(1), which states that the TCO is deemed to have come into force on the day the application was lodged.
Breach of the conditions set forth in the Customs Act 1901 could result in civil or criminal consequences. For example, if an entity fails to comply with the provisions of a TCO, they may be subject to penalties under the relevant sections of the Customs Act. The maximum penalties for such breaches can include fines or imprisonment, depending on the severity of the offence. Specifically, under section 270 of the Customs Act, any person who wilfully makes a false statement or representation in an application for a TCO may be liable to a penalty of up to $22,200 or imprisonment for up to two years, or both.
The TCO itself does not impose any liabilities on any person other than the Commonwealth. It ensures that the rights of a person as at the date of registration are not adversely affected, and it specifically states that it does not disadvantage any person or impose liabilities on anyone in respect of anything done or omitted before the registration date. Importers of the affected goods can benefit by applying for a refund of duty on goods imported since the day the TCO came into force, under paragraph 126(1)(r) of the Regulations.