EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1116082
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.
NEC Australia Pty Ltd applied for a TCO in respect of certain cinema projector parts on 20 May 2011.
Instrument
TCO No 1116082 was made on 08 August 2011. It declares that those certain cinema projector parts 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. 1116082 is taken to have come into force on 20 May 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. 1116082 was enacted in 2011 under the Customs Act 1901 to provide relief from customs duties on certain goods that would otherwise be subject to a tariff. This instrument addresses the gap in duty concessions for specific goods by allowing the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) under the authority granted by section 269F of the Act. This legislative measure was introduced to support businesses by reducing the financial burden of customs duties on certain imported goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. The policy objective is to facilitate the import of goods that are necessary for business operations and are not readily available domestically, thereby promoting economic efficiency and competitiveness.
The enactment of this instrument by the relevant authority ensures that the process of applying for and granting tariff concessions is transparent and includes opportunities for public consultation. As outlined in section 269K(1) of the Act, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may have reasons to oppose the making of a TCO. In this instance, no submissions were received, and the TCO was issued on 8 August 2011, effective from 20 May 2011. This instrument also ensures that it does not adversely affect the rights of any person other than the Commonwealth, thereby maintaining fairness and protecting the interests of all stakeholders involved.
Scope and Application
The Customs Act 1901, as modified by Tariff Concession Instrument No. 1116082, pertains to the imposition of customs duties on specific goods. This instrument applies to the entity NEC Australia Pty Ltd and their application for a Tariff Concession Order (TCO) regarding certain cinema projector parts. The Act operates under the Commonwealth jurisdiction, and the application of this TCO is confined to the goods specified in the instrument, namely those cinema projector parts for which the general rate of duty is reduced to free. This concession is effective from the date the application was lodged, 20 May 2011, as per the Act's provisions. The CEO of Customs has determined that the application meets the core criteria under section 269C of the Act, ensuring that no substitutable goods were produced in Australia on the date the application was lodged. The TCO does not disadvantage any person or impose liabilities for actions taken prior to its registration, and it provides benefits to importers who can now apply for a refund of duty on imports of these parts from the effective date.
Key Provisions
The main operative sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCOs) are sections 269C, 269F, 269P, and 269SJ. Section 269F allows for applications to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods, provided that the goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria under section 269C, they must make a TCO, as per section 269P(3). The core criteria, as per section 269C, are met if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged.
The obligations imposed by the Act on the parties involved are primarily on the CEO of Customs. The CEO must assess applications for TCOs to determine if they meet the core criteria, which involves verifying that no substitutable goods were produced in Australia on the date of the application. Additionally, as per subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who may have reasons why the TCO should not be made. This ensures transparency and allows for public input on the application. In this case, the CEO did not receive any submissions in response to the published notice.
Breaches of the obligations under the Customs Act 1901 can lead to civil and criminal consequences. Although specific offences, penalties, or consequences are not detailed in the explanatory statement, the general nature of breaches under the Customs Act could result in penalties, including fines or imprisonment, depending on the severity of the breach. For instance, making a false statement or providing misleading information in an application for a TCO could lead to penalties under other sections of the Act. The maximum penalties for such offences can vary, but they are typically prescribed in the relevant legislation or regulations.