EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1137810
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.
Lincoln Sentry Group applied for a TCO in respect of certain lights on 14 November 2011.
Instrument
TCO No 1137810 was made on 07 February 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. 1137810 is taken to have come into force on 14 November 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 comprehensive framework for customs duties, border control, and related matters in Australia. The Act facilitates international trade and revenue collection through the imposition of customs duties on imported goods. To address specific trade needs and promote economic efficiency, Part XVA of the Act allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs). These orders can lower the customs duty rate on certain imported goods under specific circumstances, thereby encouraging trade and reducing costs for businesses. Enacted by the Parliament of Australia, the Act aims to balance revenue generation with facilitating legitimate trade activities.
The Tariff Concession Instrument No. 1137810 was introduced to provide relief for certain imported goods by reducing their customs duty rate. This particular instrument was made following an application by Lincoln Sentry Group for tariff concessions on certain lights. The instrument was issued after the CEO of Customs determined that no substitutable goods were produced in Australia, meeting the core criteria for a TCO under section 269C of the Act. The policy objective of this instrument is to support trade by reducing the financial burden on importers of these goods, thereby promoting economic efficiency and competitive pricing in the market.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 1137810, applies to the application process for Tariff Concession Orders (TCOs) concerning certain imported goods. This Act facilitates the reduction or exemption of customs duties on specified goods, provided the application for a TCO meets the core criteria outlined in the Act. Specifically, the Act applies to individuals or entities that wish to apply for a TCO on behalf of imported goods, subject to the condition that no substitutable goods are produced in Australia. The Act's application is national in scope, extending across all jurisdictions within Australia, and it specifically governs the process and criteria for approving TCOs. The Act excludes certain goods, as detailed in section 269SJ, from the scope of TCOs, ensuring that only those goods meeting the specified conditions are eligible for tariff concessions. Additionally, the Act allows for the extension or restriction of its application through subordinate instruments, enabling the CEO to adapt to specific needs or circumstances in the application process.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1137810 include section 269C (core criteria for tariff concession), section 269F (application process for a Tariff Concession Order), and section 269P(3) (requirement for the CEO to issue a written order if the application meets the core criteria). Section 269C specifies that a Tariff Concession Order (TCO) application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269F allows a person to apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application meets the core criteria and is not in respect of goods specified in section 269SJ, the CEO must make a TCO. Section 269P(3) stipulates that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must issue a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies.
The Customs Act 1901 imposes specific obligations on the Chief Executive Officer of Customs (CEO) regarding the processing of TCO applications. Under section 269K(1), the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who considers there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO is also required to determine whether the application meets the core criteria as outlined in section 269C. If the application satisfies these criteria, the CEO must make a written TCO, as per section 269P(3). Additionally, under section 269S(1), a TCO is taken to have come into force on the day on which the application for the TCO was lodged.
The Act includes provisions for offences, penalties, and consequences for breaches related to TCOs, although specific penalties are not detailed within the text of the Explanatory Statement. Generally, under the Customs Act 1901, breaches related to the incorrect application or misuse of TCOs could lead to civil or criminal penalties. For example, knowingly making a false statement in an application for a TCO could result in penalties under the False Statements in Customs and Excise Matter Regulations 1977. These penalties may include fines and, in severe cases, imprisonment. The exact penalties would depend on the specific nature of the breach and applicable laws.