EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0702648
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 scroll saws on 28 February 2007.
Instrument
TCO No 0702648 was made on 25 May 2007. It declares that those certain scroll saws 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 0%.
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. 0702648 is taken to have come into force on 28 February 2007.
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, enacted by the Australian Parliament, provides a framework for the imposition of customs duties on imported goods. The Act includes provisions for Tariff Concession Orders (TCOs), which allow for lower rates of customs duty on certain goods, provided they meet specific criteria. This legislative instrument, F2007L01703, addresses the need for tariff concessions to support industries that rely on imported goods which have no domestic equivalent. The instrument was introduced to facilitate lower customs duty rates on specified goods, thereby supporting industry competitiveness and consumer access to certain products. The Chief Executive Officer of Customs has the authority to grant these concessions, subject to meeting the core criteria outlined in the Act, and to ensure there are no substitutable goods produced in Australia. The policy objective is to encourage fair trade practices while providing relief to industries that may be disadvantaged by high customs duties on essential imported goods.
Scope and Application
The Customs Act 1901, specifically Part XVA, governs the process for making Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs can apply a lower rate of customs duty to certain goods. This legislation applies to any person or entity seeking a tariff concession for goods that are not specified in section 269SJ of the Act as ineligible for such concessions. The Act's application extends across the Commonwealth of Australia, impacting industries and transactions involving the importation of goods eligible for tariff concessions. The scope of the Act is further extended or restricted through subordinate instruments, ensuring its provisions are applied consistently and effectively across different contexts and industries. Exclusions from the Act’s application include goods listed in section 269SJ, which explicitly prohibits certain goods from being subject to a TCO. The Act ensures that the imposition of tariffs does not disadvantage existing rights or impose liabilities on persons for actions taken before the TCO’s effective date, thereby protecting the interests of both the Commonwealth and private entities.
Key Provisions
The key operative sections of this legislation include sections 269F, 269C, 269B, 269P, and 269K of the Customs Act 1901, which set out the framework for Tariff Concession Orders (TCOs). Section 269F allows an application to be made to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. The CEO must then decide whether the application meets the core criteria set out in section 269C, which is defined by section 269B. If the application meets these criteria, the CEO must make a written order declaring that the goods are subject to a TCO (section 269P(3)). Section 269K requires the CEO to publish a notice in the Gazette, inviting submissions on the TCO application.
The obligations imposed by the Act on parties include the requirement for the CEO to assess TCO applications against the core criteria and to publish notices inviting submissions. For applicants, the obligation is to ensure their application meets the core criteria, specifically that no substitutable goods are produced in Australia in the ordinary course of business at the time the application is lodged. Additionally, the CEO must ensure that any TCO does not disadvantage or impose liabilities on any person other than the Commonwealth.
Offences and penalties are not explicitly detailed in the provided text, but any breach of the conditions or obligations under the Act could potentially lead to legal consequences. For example, making a false statement in a TCO application could be considered a criminal offence under other provisions of the Customs Act, with penalties including fines and imprisonment. Civil consequences might include the imposition of fines or other financial penalties, depending on the specific breach and the courts' discretion.
The TCO itself provides a lower rate of customs duty on certain scroll saws, specifically a 0% rate as opposed to the general 5% rate. This concession applies from the date the application for the TCO was lodged, which is 28 February 2007. The TCO does not affect the rights of any person except to the benefit of importers, who can apply for a refund of duty on goods imported since the TCO came into force.