EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0620041
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 Pty Ltd applied for a TCO in respect of certain garden blowers and/or sweepers on 21 December 2006.
Instrument
TCO No 0620041 was made on 16 March 2007. It declares that those certain garden blowers and/or sweepers 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. 0620041 is taken to have come into force on 21 December 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. 0620041 was enacted under the Customs Act 1901 to address the issue of providing tariff concessions for specific goods, thereby potentially reducing the financial burden on importers. This instrument was introduced to facilitate tariff concessions for certain garden blowers and/or sweepers by GMC Powertools Australia Pty Ltd, which applied for the concession on 21 December 2006. The instrument was made on 16 March 2007 by the Chief Executive Officer of Customs, who was satisfied that no substitutable goods were produced in Australia in the ordinary course of business, thereby meeting the core criteria as outlined in the Act. This legislative instrument was enacted by the relevant legislature to provide a streamlined process for tariff concessions, ensuring that importers can benefit from reduced duty rates on specified goods without any retroactive liabilities or disadvantages.
Scope and Application
The Customs Act 1901, as supplemented by the Tariff Concession Instrument No. 0620041, pertains to the application and administration of Tariff Concession Orders (TCOs) for certain goods entering Australia. Specifically, this legislation applies to any entity or individual seeking to import goods that may qualify for a concession on customs duty, provided the goods are not listed in section 269SJ of the Act as ineligible for such concessions. The Act allows the Chief Executive Officer of Customs to make TCOs if no substitutable goods are produced in Australia and if the application meets the core criteria outlined in sections 269C, 269B, and 269D. The scope of this Act is nationwide, operating under the Commonwealth jurisdiction. The application process requires public notification, inviting submissions from interested parties, though in this instance, no submissions were received. The TCO No. 0620041, effective from 21 December 2006, applies to certain garden blowers and sweepers, granting them a free rate of duty instead of the general 5% rate. Notably, the TCO does not affect pre-existing rights or impose new liabilities on anyone except the Commonwealth.
Key Provisions
The Tariff Concession Order (TCO) No. 0620041, issued under section 269F of the Customs Act 1901, establishes a tariff concession for certain garden blowers and/or sweepers, allowing them to be imported duty-free. This concession is effective from 21 December 2006, the date on which the application was lodged (subsection 269S(1)). The concession applies to goods specified in item 50 of Schedule 4 to the Customs Tariff Act 1995. For these goods, the normal customs duty rate of 5% is reduced to zero.
The Act imposes several obligations on entities applying for a TCO. Firstly, an applicant must ensure that their application is lodged in accordance with section 269F and is not for goods specified in section 269SJ, which cannot be subject to a TCO. The Chief Executive Officer of Customs (CEO) must then determine if the application meets the core criteria under section 269C, specifically whether no substitutable goods were produced in Australia on the day the application was lodged. This determination hinges on the definitions of 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods' provided by sections 269D, 269E, and 269F respectively.
Failure to comply with the provisions of the Customs Act 1901 regarding TCOs may result in civil or criminal consequences. For example, providing false information in an application for a TCO could lead to penalties under section 278 of the Act, which addresses fraudulent behaviour in relation to customs and excise matters. Such offences can result in significant fines and/or imprisonment. The maximum penalties for serious offences under the Act can include fines of up to $22,000 and/or imprisonment for up to two years. Additionally, any person who knowingly or recklessly makes a false statement in an application for a TCO may face further penalties under section 283 of the Act, which can include fines and imprisonment.