EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1126558
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.
Powerplants Australia applied for a TCO in respect of certain horticultural lamps on 05 August 2011.
Instrument
TCO No 1126558 was made on 02 November 2011. It declares that those certain horticulture lamps 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. 1126558 is taken to have come into force on 05 August 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. 1126558, enacted under the Customs Act 1901, aims to facilitate the importation of goods by providing tariff concessions, thereby reducing the customs duty payable on certain goods. The Customs Act 1901 establishes a framework where the Chief Executive Officer of Customs can grant Tariff Concession Orders (TCOs) to lower the customs duty for specified goods, provided certain criteria are met. This instrument was introduced to address the problem of high customs duties on specific goods, which can impede their import and affect market availability. The instrument was enacted by the Commonwealth Parliament and its policy objective is to encourage the importation of goods by making them more affordable through reduced customs duty, thereby benefiting both importers and consumers.
The instrument came into force on 05 August 2011, the date on which the application for the TCO was lodged. The instrument does not disadvantage any person or impose liabilities on anyone for actions taken before its registration. Importers will benefit from the rights provided under the instrument, including the ability to apply for a refund of duty on goods imported since the commencement date. This initiative aims to streamline the import process and reduce the financial burden on importers and consumers by providing a streamlined mechanism for tariff concessions.
Scope and Application
The Customs Act 1901, through Part XVA, establishes a framework for Tariff Concession Orders (TCOs) which can be applied for by individuals or entities seeking a lower rate of customs duty on certain goods. This process is overseen by the Chief Executive Officer of Customs, who evaluates applications against the core criteria outlined in the Act. Specifically, if the CEO determines that no substitutable goods are produced in Australia and that the goods in question are not excluded under section 269SJ, a TCO can be issued, granting the applicant a tariff concession. This legislation applies nationwide, impacting importers and businesses involved in the importation of goods specified in a TCO. Exclusions and limitations are set out in the Act, particularly concerning goods that are already being produced domestically in a manner that could substitute the imported goods. The scope of the Act is further defined and potentially expanded through subordinate instruments, which can include regulations or additional schedules that provide more detailed definitions and operational guidelines. The application of a TCO, such as TCO No 1126558 concerning horticultural lamps, is effective from the date the application is lodged and does not retroactively affect pre-existing rights or liabilities.
Key Provisions
The Customs Act 1901, specifically under Part XVA, outlines the framework for Tariff Concession Orders (TCOs) that can be issued by the Chief Executive Officer of Customs (CEO) (s 269F). These orders permit a lower rate of customs duty on goods specified within the TCO (s 269P(3)). An application for a TCO can be made by any person to the CEO (s 269F), provided the goods are not listed in section 269SJ as ineligible for TCOs. The CEO then assesses whether the application meets the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (s 269C). Definitions for terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively.
The obligations imposed on parties under this legislation include the requirement for applicants to ensure their applications meet the core criteria and for the CEO to assess these applications against the specified conditions. Additionally, the CEO is mandated to publish a notice in the Gazette inviting submissions from any interested parties if they believe the TCO should not proceed (s 269K(1)). In the case of TCO No 1126558, the CEO did not receive any submissions. The TCO is effective from the date the application was lodged (s 269S(1)), which in this instance was 05 August 2011. The legislation also ensures that the rights of third parties, other than the Commonwealth, are not adversely affected by the issuance of the TCO (s 269S(1)).
In terms of penalties and consequences, the Act does not specify any particular offences or penalties for breaches related to TCOs. However, the implications of not complying with the conditions set out in the Act could potentially lead to the nullification of the TCO, which would result in the original duty rates applying to the specified goods. Additionally, any person who fails to adhere to the provisions of the Customs Act 1901 may face broader legal consequences as outlined in other sections of the Act, including potential fines or imprisonment. The specific penalties for such breaches are not detailed in the explanatory statement for TCO No 1126558 but would generally fall under the broader regulatory framework of the Customs Act 1901.