EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618959
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.
GMC Powertools Australia applied for a TCO in respect of certain portable glue gun kits on 24 November 2006.
Instrument
TCO No 0618959 was made on 05 March 2007. It declares that those certain portable glue gun kits 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. 0618959 is taken to have come into force on 24 November 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 Customs Act 1901 was enacted to regulate the import and export of goods in Australia, among other things. The Act was introduced to address the need for streamlined customs processes and to provide for the imposition of duties on imported goods, among other objectives. The Tariff Concession Instrument No. 0618959 was created under this Act by the Chief Executive Officer of Customs. The instrument was introduced to address the need for tariff concessions on specific goods, in this case, certain portable glue gun kits, to promote fair trading practices and economic efficiency. The instrument was developed following an application from GMC Powertools Australia and aims to provide a lower rate of customs duty on these goods. This legislative measure ensures that the rights of importers are beneficially affected without imposing any liabilities on any person.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) which allow for a reduced rate of customs duty on certain goods. These orders are made by the Chief Executive Officer of Customs, provided the goods in question do not fall under the exclusions outlined in section 269SJ and the application meets the core criteria set out in sections 269C, 269B, and 269D. The Act applies to any individual or entity seeking to import goods that can benefit from a TCO, and the process involves ensuring that no substitutable goods are being produced in Australia. TCO No. 0618959, for example, applies to certain portable glue gun kits, reducing their duty rate from the general 5% to free. This concession is applicable nationwide, aligning with the overarching Customs Act 1901, which operates under Commonwealth jurisdiction. Notably, the TCO does not affect the rights of any person as they stood before the order's registration, nor does it impose any new liabilities. Instead, it primarily benefits importers by potentially allowing them to claim refunds on duties paid on the specified goods since the effective date of the TCO, which is the date the application was lodged.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0618959, under the Customs Act 1901, establish the framework for the creation of Tariff Concession Orders (TCOs) (sections 269C, 269F, 269K, and 269S). A TCO, as defined in section 269P(3), allows for a lower rate of customs duty on specified goods if certain criteria are met, such as the absence of substitutable goods produced in Australia (section 269C). This specific TCO (Instrument TCO No. 0618959) pertains to certain portable glue gun kits, which now benefit from a duty-free rate as opposed to the general 5% rate (Schedule 4, item 50, Customs Tariff Act 1995).
The obligations imposed by the Act on entities and individuals are primarily centred around the application process for a TCO. An applicant must submit an application to the Chief Executive Officer of Customs (CEO) and provide sufficient evidence that no substitutable goods are produced in Australia (section 269C). The CEO is then tasked with verifying these claims and making a decision based on the core criteria. Furthermore, the CEO must publish a notice in the Gazette inviting any objections to the proposed TCO (subsection 269K(1)), although no objections were received in this instance.
Should there be a breach of the provisions within the Customs Act 1901, various penalties and consequences could apply. The Act does not explicitly detail the penalties for non-compliance with TCOs; however, general breaches of the Customs Act can lead to substantial fines and, in severe cases, criminal charges. The maximum penalties vary depending on the nature and severity of the breach but can include fines up to the greater of $22,200 or three times the benefit obtained from the breach, as well as potential imprisonment terms. The specifics of these penalties are outlined in other sections of the Customs Act and related legislation.