EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1118391
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.
Energy Options International Pty Ltd applied for a TCO in respect of certain downlights on 08 June 2011.
Instrument
TCO No 1118391 was made on 05 September 2011. It declares that those certain downlights 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. 1118391 is taken to have come into force on 08 June 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, as amended, allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCO) that reduce the rate of customs duty on certain imported goods. The Tariff Concession Instrument No. 1118391, enacted on 5 September 2011, grants a tariff concession for specific downlights, reducing their duty from the general rate of 5% to free, following an application by Energy Options International Pty Ltd on 8 June 2011. The CEO was satisfied that no substitutable goods were produced in Australia, meeting the core criteria for a TCO. The instrument was published in the Gazette, with no objections received. The TCO aims to benefit importers by allowing them to apply for duty refunds on goods imported since the TCO's effective date without imposing any liabilities.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the scheme for Tariff Concession Orders (TCOs), which allow for lower rates of customs duty on specified goods. An application for a TCO can be made by a person to the Chief Executive Officer of Customs (CEO) under section 269F of the Act, provided the goods in question are not those prohibited by section 269SJ. The CEO must determine if the application meets the core criteria, which include the absence of substitutable goods produced in Australia at the time of the application, as outlined in section 269C. If the criteria are met, the CEO issues a written order specifying the applicable tariff concession. This legislation applies nationally across Australia, impacting entities involved in the importation of the specified goods by reducing their customs duty liability.
TCO No. 1118391, issued on 05 September 2011, pertains to certain downlights applied for by Energy Options International Pty Ltd. The instrument declares these downlights as goods subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with the general duty rate of 5% being reduced to free duty. This TCO came into force on 08 June 2011, the date the application was lodged, and does not affect the rights of any person other than the Commonwealth. Importers of the specified goods can benefit from a refund of duty paid on imports since the effective date of the TCO, without incurring any new liabilities. The CEO published a notice inviting submissions against the TCO application, but none were received.
Key Provisions
The main operative sections of the Customs Act 1901, as related in this Tariff Concession Order, include sections 269F, 269C, 269P, and 269S. Section 269F allows for an application to be made to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of certain goods. The CEO, under section 269C, must assess whether the application meets the core criteria, specifically that no substitutable goods were produced in Australia at the time of application. If these criteria are met, section 269P(3) mandates that the CEO issue a written TCO. The TCO, once issued, declares that the specified goods are subject to a reduced rate of customs duty as per a prescribed item in the Customs Tariff Act 1995.
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 ensure they meet the core criteria outlined in the Act. This involves verifying that no substitutable goods were produced in Australia at the time of the application. Upon satisfying these conditions, the CEO must issue a TCO that declares the specified goods subject to a reduced rate of customs duty. Additionally, the CEO is required to publish a notice in the Gazette inviting any interested parties to submit objections to the TCO. In this case, no objections were received, facilitating the issuance of TCO No. 1118391.
The Customs Act 1901 and associated regulations do not specify any direct offences or penalties for breaching the conditions of a TCO. However, any breaches of the Act's provisions related to the issuance or administration of TCOs may lead to enforcement actions under other relevant sections of the Customs Act. This could include civil or criminal penalties for non-compliance with customs regulations or misrepresentation of facts in an application. The maximum penalties for such offences can vary widely, depending on the severity and intent behind the breach, but can include substantial fines and potential imprisonment. The Act ensures that the issuance of a TCO does not disadvantage any person or impose liabilities on them for actions taken prior to the TCO's effective date.