EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0602380
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.
Makita Australia Pty Ltd applied for a TCO in respect of certain tool sets on 18 January 2006.
Instrument
TCO No 0602380 was made on 10 April 2006. It declares that those certain tool sets 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. 0602380 is taken to have come into force on 18 January 2006.
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. 0602380 was enacted in 2006 under the Customs Act 1901 to address the need for a scheme that provides tariff concessions for specific goods. This instrument was introduced to allow the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) which apply lower rates of customs duty to goods specified in the order, provided certain criteria are met. The primary objective of this legislation, as stated, is to facilitate tariff reductions for goods that are not produced in Australia or for which no suitable substitutes are manufactured domestically, thereby promoting competitive imports and potentially reducing costs for consumers and businesses. The instrument was enacted by the relevant federal authority, ensuring alignment with broader trade policy objectives and facilitating smoother import processes for the specified goods.
Scope and Application
The Customs Act 1901, specifically through Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, aimed at providing lower rates of customs duty on specified goods. This legislation applies to any person or entity seeking a tariff concession for goods not specified in section 269SJ of the Act, which lists goods ineligible for TCOs. The application process requires the CEO to assess whether the goods in question are not substitutable by any produced in Australia, as defined in sections 269D and 269E. Once the core criteria are met, a written TCO is issued, effectively applying a prescribed tariff rate from Schedule 4 of the Customs Tariff Act 1995. This instrument is applicable nationally across Australia, with its effects commencing on the date the TCO application is lodged. The legislation ensures that existing rights and liabilities are preserved, and provides a mechanism for importers to seek duty refunds for eligible goods imported since the TCO's effective date.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0602380 (TCO No. 0602380) involve the creation of a tariff concession order (section 269C) and the application process (section 269F). Section 269C of the Customs Act 1901 stipulates that a TCO application is considered valid if the Chief Executive Officer (CEO) of Customs is satisfied that 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 determines that the application meets the core criteria and no submissions are received against it, the CEO is required to make a written order declaring that the goods in question are subject to a prescribed rate of duty specified in Schedule 4 to the Customs Tariff Act 1995.
The obligations and requirements imposed by this Act on the parties it governs include the necessity for applicants to ensure that their applications for TCOs are lodged in accordance with the provisions of section 269C. The CEO must conduct a thorough review to confirm that no substitutable goods were produced in Australia and that the application does not pertain to goods specified in section 269SJ, which are ineligible for TCOs. Furthermore, the CEO is mandated by section 269K(1) to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. Once the CEO has assessed the application and received no objections, the TCO will be issued, and the specified goods will be subject to the reduced rate of duty as outlined in the order.
The Customs Act 1901 and related regulations do not explicitly outline specific offences, penalties, or civil/criminal consequences for breaches directly related to the issuance or application of TCOs. However, any general breach of the Customs Act provisions could potentially lead to civil or criminal penalties, depending on the nature and severity of the violation. The maximum penalties for breaches of customs regulations can vary widely, but they often include substantial fines and, in more severe cases, imprisonment. The specifics of these penalties would be determined by the courts based on the particular circumstances of the breach.