EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1135623
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.
Enbertec Pty Ltd applied for a TCO in respect of certain power point double adaptors on 24 October 2011.
Instrument
TCO No 1135623 was made on 16 January 2012. It declares that those certain power point double adaptors 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. 1135623 is taken to have come into force on 24 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 Tariff Concession Instrument No. 1135623 was introduced to address the issue of tariff concessions for certain goods under the Customs Act 1901. Enacted by the Chief Executive Officer of Customs, this instrument provides a mechanism for granting tariff concessions for specific goods, in this case, certain power point double adaptors, when no substitutable goods are produced in Australia. The primary objective of this instrument is to facilitate the import of these goods by reducing or eliminating the customs duty, thereby providing economic benefits to importers. The instrument was introduced following an application by Enbertec Pty Ltd, and it came into force on the date the application was lodged, 24 October 2011. The process involved public consultation, though no submissions were received in response to the published notice.
Scope and Application
The Customs Act 1901, through the Tariff Concession Instrument No. 1135623, applies to entities and individuals involved in the importation of certain power point double adaptors. This legislation is concerned with the administration and enforcement of customs duties and tariffs, specifically providing for the concession of tariffs for designated goods. The instrument extends to the entire Commonwealth of Australia and is applicable to the importation of the specified goods for which the Tariff Concession Order (TCO) was issued. The TCO applies to goods that are imported into Australia and specifies that these goods are subject to a reduced rate of customs duty, or in this case, duty-free treatment. This legislation does not impose any new liabilities on individuals or entities but rather modifies the existing duty on the specified goods, benefitting importers by potentially allowing them to claim refunds on duties paid before the TCO came into effect. The TCO does not disadvantage any person other than the Commonwealth and does not affect existing rights as at the date of registration. The CEO of Customs must ensure that applications for TCOs are published in the Gazette, inviting any interested parties to lodge submissions; however, in this instance, no submissions were received. The TCO is effective from the date the application was lodged, in this case, 24 October 2011.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1135623, which was made under the Customs Act 1901, include sections 269C, 269P, and 269SJ. Section 269C outlines the core criteria that an application for a Tariff Concession Order (TCO) must meet. This includes ensuring that no substitutable goods are produced in Australia on the day the application is lodged (section 269C). Section 269P(3) stipulates that if these core criteria are met, the Chief Executive Officer of Customs (CEO) must issue a written TCO. Section 269SJ, meanwhile, lists goods that cannot be subject to a TCO. The instrument itself, TCO No. 1135623, was made on 16 January 2012 and specifies that certain power point double adaptors are subject to a free rate of duty under item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Customs Act 1901 imposes several obligations on the parties involved in the process of applying for and issuing a TCO. Firstly, the CEO must determine whether an application for a TCO meets the core criteria as outlined in section 269C. This involves verifying that no substitutable goods are being produced in Australia. If the CEO is satisfied that these criteria are met, they are required 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 stipulated in section 269K(1). Additionally, the Act ensures that the rights of any person (other than the Commonwealth) are not adversely affected by the TCO, and that no new liabilities are imposed as a result of the TCO.
The Act outlines specific offences and penalties for breaches related to the issuance and operation of a TCO. However, the explanatory statement for Tariff Concession Instrument No. 1135623 does not specify any particular penalties for breaches of the TCO itself. The general provisions of the Customs Act 1901 would apply to any breaches, which could include civil or criminal penalties depending on the nature and severity of the breach. For example, section 234 of the Customs Act 1901 provides that a person who makes a false statement or representation in an application for a TCO can be fined up to $22,200 for an individual or $111,000 for a body corporate. Section 235 further stipulates that a person who is found guilty of an offence under the Act can be subject to imprisonment for up to five years. These penalties underscore the importance of compliance with the requirements set out in the Act and the TCO.