EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1126581
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.
Denso Automotive Systems Australia applied for a TCO in respect of certain radio broadcast receivers on 04 August 2011.
Instrument
TCO No 1126581 was made on 02 November 2011. It declares that those certain radio broadcast 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. 1126581 is taken to have come into force on 04 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for the administration of customs duties and tariffs, including provisions for Tariff Concession Orders (TCOs) under Part XVA. These orders, made by the Chief Executive Officer of Customs, allow for a lower rate of customs duty on specified goods when certain criteria are met. The problem or gap this legislation addresses is the potential for economic disadvantage to Australian industries when substitutable goods are not produced domestically. The policy objective is to encourage domestic production and support industry competitiveness by providing tariff relief where appropriate. The Explanatory Statement for Tariff Concession Instrument No. 1126581 outlines that Denso Automotive Systems Australia applied for a TCO on certain radio broadcast receivers, which was granted as no substitutable goods were produced in Australia at the time. This instrument exemplifies the process by which tariff concessions are assessed and applied, ensuring that such concessions do not disadvantage existing rights or impose new liabilities on non-Commonwealth entities.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the scheme for Tariff Concession Orders (TCOs) which allow for a lower rate of customs duty on certain goods. This Act applies to any person or entity seeking to import goods that are eligible for a tariff concession, provided that the goods do not fall within the restricted categories outlined in section 269SJ of the Act. The Act has a national jurisdictional reach, as it is a Commonwealth Act. A TCO can be applied for by any person by submitting an application to the Chief Executive Officer of Customs (CEO). The CEO must determine whether the application meets the core criteria, particularly whether no substitutable goods are being produced in Australia in the ordinary course of business. If these criteria are met, the CEO is mandated to issue a written order declaring that the specified goods are subject to a lower rate of customs duty. The scope of the Act is further extended through subordinate instruments which may specify additional details or criteria for TCOs. Notably, the Act ensures that the implementation of a TCO does not adversely affect the rights of any person other than the Commonwealth, and does not impose any new liabilities on individuals or entities.
Key Provisions
The main operative sections of this legislation are sections 269C, 269P, and 269S of the Customs Act 1901. Section 269C specifies the core criteria that must be satisfied for an application for a Tariff Concession Order (TCO) to be valid. According to section 269P, if the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria, they must make a written order declaring that the goods are subject to a TCO. Section 269S details the commencement date of the TCO, which is considered to be the day the application was lodged. The TCO reduces the duty on certain radio broadcast receivers from the general rate of 5% to free of charge, as declared in TCO No. 1126581.
The obligations imposed by this Act on parties or entities it governs include the requirement for an applicant to demonstrate that no substitutable goods were produced in Australia on the day the TCO application was lodged. This is detailed in section 269C, which defines 'substitutable goods' and 'ordinary course of business'. The CEO is obligated to decide whether an application meets the core criteria, and if so, to issue a TCO. The CEO must also publish a notice in the Gazette, inviting submissions from any person who believes the TCO should not be made, as per subsection 269K(1). Additionally, importers of the goods affected by the TCO can apply for a refund of duty paid on imports since the TCO's effective date, as per paragraph 126(1)(r) of the Regulations.
The legislation outlines specific consequences for non-compliance or breaches. While the explanatory statement does not specify criminal or civil penalties for failing to comply with the TCO requirements, the general provisions of the Customs Act 1901 would apply, potentially including fines and imprisonment for serious breaches. The Act ensures that the rights of persons other than the Commonwealth are not adversely affected by the TCO, and no new liabilities are imposed on any person as a result of the TCO. Importers are granted the benefit of applying for a refund of duty on goods imported since the TCO's effective date, which is a direct consequence of the TCO's implementation.