EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1133649
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 applied for a TCO in respect of certain lights on 04 October 2011.
Instrument
TCO No 1133649 was made on 04 January 2012. It declares that those certain lights 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. 1133649 is taken to have come into force on 04 October 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 was enacted to provide a framework for the regulation of customs and excise in Australia. This Act introduced a scheme under which Tariff Concession Orders (TCOs) could be made to provide tariff concessions for specific goods. The 2012 Tariff Concession Instrument No. 1133649 was introduced by the Chief Executive Officer of Customs (CEO) to provide tariff concessions for certain lights applied for by Energy Options International. The CEO determined that these goods were not substitutable by any goods produced in Australia, thus satisfying the core criteria for a TCO. Consequently, the CEO made a TCO declaring that these lights would be subject to a duty rate of free, down from the general rate of 5%. The instrument was published in the Gazette with no objections received. The TCO was effective from the date the application was lodged, 4 October 2011, and it did not impose any liabilities on any person, providing benefits to importers by allowing them to apply for a refund of duty on goods imported since the TCO's effective date.
Scope and Application
The Customs Act 1901, through Part XVA, enables the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) which provide for lower rates of customs duty on certain goods. This Act applies to any person or entity seeking tariff concessions for goods not specified in section 269SJ of the Act, which prohibits certain goods from being subject to a TCO. The application process involves determining whether the goods in question are substitutable by goods produced in Australia in the ordinary course of business, as defined by the Act. If no such goods are produced, and the application meets the core criteria, the CEO must issue a TCO. This instrument, TCO No 1133649, specifically pertains to certain lights, which are now subject to a free rate of duty under item 50 of Schedule 4 to the Customs Tariff Act 1995. The TCO came into effect on the date the application was lodged, 04 October 2011, and does not affect any pre-existing rights or impose liabilities on persons other than the Commonwealth.
Key Provisions
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (section 269F). When a person applies for a TCO for certain goods, the CEO evaluates whether the application meets the core criteria set out in section 269C. If the CEO determines that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, the CEO must grant the TCO (section 269P(3)). This instrument, TCO No. 1133649, was made on 4 January 2012, declaring that certain lights are subject to a free duty rate, as no Australian-produced substitutable goods were identified.
The obligations under the Customs Act 1901 for parties involved include the requirement for the CEO to consider the core criteria for TCO applications (section 269C) and ensure that no substitutable goods were produced in Australia on the application date (section 269D, 269E). The CEO must also publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be granted (subsection 269K(1)). In this instance, no submissions were received. The TCO applies from the date the application was lodged, 4 October 2011 (subsection 269S(1)).
The Act does not impose any new liabilities on individuals or entities as a result of the TCO. However, it does provide a benefit to importers by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO (paragraph 126(1)(r) of the Regulations). The TCO does not disadvantage any person or impose new liabilities on anyone other than the Commonwealth.
Failure to comply with the provisions of the Customs Act 1901 may result in civil or criminal consequences. Although specific offences and penalties are not detailed in this explanatory statement, breaches of the Act generally may lead to penalties as prescribed by the relevant sections of the Act or other related legislation. The maximum penalties can vary depending on the nature and severity of the breach, and may include fines or imprisonment, as provided by the Customs Act 1901 or other applicable laws.