EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1111415
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.
Altronics applied for a TCO in respect of certain microphone transmitters and receivers on 30 March 2011.
Instrument
TCO No 1111415 was made on 20 June 2011. It declares that those certain microphone transmitters and receivers 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. 1111415 is taken to have come into force on 30 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. 1111415 was enacted under the Customs Act 1901 to address the need for tariff concessions on certain goods, allowing for lower rates of customs duty where applicable. This legislation was introduced by the Chief Executive Officer of Customs, who is empowered to make Tariff Concession Orders (TCOs) under section 269F of the Act. The primary policy objective behind this instrument is to support the importation of goods that do not have local Australian alternatives, thereby potentially reducing costs for businesses and consumers. Altronics' application for a TCO concerning specific microphone transmitters and receivers was approved, resulting in these goods being subject to a zero rate of customs duty instead of the usual 5%. The instrument was enacted to ensure that no substitutable goods were produced in Australia, as required by section 269C of the Act, and no objections were raised following the publication of the application in the Gazette. The TCO came into effect on 30 March 2011, the date the application was lodged, and provides benefits to importers by allowing them to apply for a refund of duty on goods imported since that date, without imposing any new liabilities.
Scope and Application
The Tariff Concession Instrument No. 1111415 under the Customs Act 1901 applies to Altronics' application for a Tariff Concession Order (TCO) concerning certain microphone transmitters and receivers. This application was made on 30 March 2011 and the TCO was issued on 20 June 2011, specifying that these goods are subject to a free rate of duty as per item 50 of Schedule 4 to the Customs Tariff Act 1995, instead of the general rate of 5%. The application process involves the Chief Executive Officer of Customs (CEO) who determines if the application meets the core criteria, primarily that no substitutable goods are produced in Australia. The CEO's decision is made in accordance with sections 269C, 269D, 269E, and 269P of the Customs Act 1901. The TCO, once issued, has retrospective effect from the date the application was lodged, which is 30 March 2011, and does not disadvantage any persons or impose liabilities for actions prior to its registration. Furthermore, it allows importers to apply for a refund of duty on these goods from the commencement date of the TCO. The instrument applies nationally across Australia, extending the application of the Customs Act 1901 to facilitate tariff concessions for specific imported goods.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 1111415 are sections 269C, 269F, 269P, and 269S of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). If the CEO determines that the application meets the core criteria under section 269C, and there are no substitutable goods produced in Australia in the ordinary course of business, the CEO is required under section 269P(3) to make a written TCO, declaring that the specified goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. The TCO will apply from the date the application was lodged as per section 269S.
The Act imposes specific obligations on the parties involved. The CEO must first ensure that the TCO application is not in respect of goods specified in section 269SJ, which are ineligible for TCOs. If the application is valid, the CEO must then verify if the core criteria are met, particularly ensuring no substitutable goods are produced in Australia. If the application is approved, the CEO must make a written TCO and declare the specified goods to which the reduced duty rate applies. The CEO must also publish a notice in the Gazette, inviting submissions from any interested parties (subsection 269K(1)).
Breaches of the provisions of the Customs Act 1901, including the misuse of a TCO, can lead to various consequences. The Act does not explicitly detail specific offences or penalties for the misuse of a TCO. However, breaches of the Customs Act generally can result in civil or criminal penalties. For instance, section 217 of the Act provides for a penalty of up to 10,000 penalty units for knowingly importing goods that do not comply with the Act. Given the absence of specific penalties for TCO misuse, it is prudent for applicants and recipients to strictly adhere to the Act's provisions to avoid potential legal ramifications.
Overall, the Tariff Concession Instrument No. 1111415, under the Customs Act 1901, provides a framework for granting tariff concessions on certain goods, ensuring that these goods are subject to a reduced rate of customs duty provided no substitutable goods are produced in Australia. The Act sets out clear processes for application and approval, and while specific penalties for misuse are not detailed, adherence to the Act is critical to avoid broader legal consequences.