EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0709854
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.
Gmcat Pty Ltd applied for a TCO in respect of certain rotary tool kits on 25 June 2007.
Instrument
TCO No 0709854 was made on 7 September 2007. It declares that those certain rotary tool 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 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. 0709854 is taken to have come into force on 25 June 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 was enacted to provide a comprehensive framework for the administration of customs and excise duties, among other things, within Australia. A significant aspect of this Act is the ability for the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) to lower the rate of customs duty on certain goods. This mechanism was introduced to address the problem of ensuring that Australian consumers and businesses have access to competitively priced imported goods, particularly those for which there are no suitable domestic substitutes. The Parliament established this process under section 269F of the Act, which allows for applications to be made for tariff concessions if certain criteria are met, ensuring that the concessions do not disadvantage Australian producers of substitutable goods. The policy objective behind this legislative instrument is to facilitate the import of goods that are not produced domestically, thereby supporting competitive markets and consumer choice while safeguarding domestic industries from unfair competition.
Scope and Application
The Tariff Concession Instrument No. 0709854, under Part XVA of the Customs Act 1901, applies to goods specified in the instrument, in this case certain rotary tool kits, and is directed at entities or individuals involved in the importation of these goods. The application of this Instrument is made by the Chief Executive Officer of Customs, who must be satisfied that the goods do not have substitutable equivalents produced in Australia. The Instrument extends across the Commonwealth of Australia, adhering to the provisions set out in the Customs Act 1901 and the Customs Tariff Act 1995. The Instrument does not impose any liabilities or disadvantage any person, including importers who may benefit from a refund of duty on the goods imported since the effective date of the concession. Notably, the Instrument does not apply to goods specified in section 269SJ of the Customs Act 1901, which outlines those goods that cannot be subject to a Tariff Concession Order. The scope of the Instrument may also be extended or modified through subordinate instruments, though the primary legislation sets out the core criteria and process for application and approval.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0709854 (the Instrument) pertain to the process of applying for and granting Tariff Concession Orders (TCOs) under the Customs Act 1901 (the Act). Section 269F allows an individual to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of specific goods. If the CEO is satisfied that the application does not relate to goods specified in section 269SJ, they must then determine whether the application meets the core criteria outlined in section 269C. If the application is deemed to meet these criteria, the CEO is required, under section 269P(3), to issue a written TCO that specifies the prescribed item in Schedule 4 to the Customs Tariff Act 1995 (the Tariff) that applies to the goods in question.
The Act imposes certain obligations on both applicants and the CEO regarding the TCO process. Applicants must ensure their application complies with the provisions of section 269F and that the goods in question do not fall under the prohibited list in section 269SJ. The CEO, on receiving a valid application, is obligated to assess the application against the core criteria, publish a notice in the Gazette inviting submissions from interested parties, and make a decision based on the received submissions. In this case, no submissions were received, allowing the CEO to proceed with issuing the TCO.
Failure to adhere to the provisions of the Act and the Instrument can result in various consequences. While the explanatory statement does not explicitly detail penalties for non-compliance, it is reasonable to infer that breaches of the customs regulations could lead to civil or criminal penalties as outlined in other sections of the Customs Act 1901 and associated regulations. For instance, section 269K(1) mandates the CEO to publish a notice in the Gazette, and failure to do so could result in procedural invalidities or legal challenges. Moreover, incorrect or fraudulent applications could lead to penalties under the general customs laws, including fines and potential criminal charges.