EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0829952
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.
Ozito Industries Pty Ltd applied for a TCO in respect of certain sander kits on 08 September 2008.
Instrument
TCO No 0829952 was made on 28 November 2008. It declares that those certain sander 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. 0829952 is taken to have come into force on 08 September 2008.
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, facilitates the application of lower customs duty rates on certain goods through Tariff Concession Orders (TCOs). This legislative instrument, specifically Tariff Concession Instrument No. 0829952, was introduced to address the need for reduced customs duties on specific goods, thereby promoting trade and economic efficiency. The explanatory statement outlines the process for applying for and receiving a TCO, which involves satisfying core criteria such as the absence of substitutable goods produced in Australia. The Tariff Concession Order No. 0829952, issued in response to an application by Ozito Industries Pty Ltd for certain sander kits, exemplifies the application of this scheme by granting a free rate of duty on these goods, as no substitutable goods were produced in Australia at the time of the application. This legislative measure aims to support businesses by reducing their import costs and ensuring they are not at a disadvantage compared to international competitors.
Scope and Application
The Customs Act 1901 provides for Tariff Concession Orders (TCOs) which can be applied for by any person seeking a lower rate of customs duty on certain goods, as outlined in Part XVA of the Act. The legislation applies to goods that are subject to a TCO, and the process involves an application to the Chief Executive Officer of Customs (CEO), who must determine if the application meets the core criteria, such as whether substitutable goods are produced in Australia. The instrument in question, TCO No. 0829952, pertains specifically to certain sander kits and was made effective from 8 September 2008, the date on which the application was lodged. The geographic reach of the Act and its TCOs is national, as they fall under the Commonwealth's authority. The application and effect of TCOs are not restricted by state or territory boundaries but are uniformly applicable across Australia. There are exclusions for goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The scope of the Act can be extended through subordinate instruments, which may further define terms or provide additional criteria for the application of TCOs.
Key Provisions
The key operative sections of Tariff Concession Instrument No. 0829952, as outlined in the Customs Act 1901 (section 269F), allow an applicant to request a Tariff Concession Order (TCO) from the Chief Executive Officer of Customs (CEO) if certain conditions are met. Specifically, section 269C stipulates that an application for a TCO will be considered if no substitutable goods were produced in Australia on the date the application was lodged. The term "substitutable goods" is defined in section 269D as goods produced in Australia that can be used for the same purpose as the goods in question, with the definition of "ordinary course of business" given in section 269E. If the CEO determines that the application meets these criteria, they must issue a written TCO, as per section 269P(3), specifying the applicable duty under Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties it governs include the requirement for the CEO to assess each TCO application against the criteria set out in sections 269C, 269D, and 269E. The CEO must also publish a notice in the Gazette, as per section 269K(1), inviting any interested parties to submit any objections or submissions regarding the application. If no submissions are received, the CEO can proceed to issue the TCO. Additionally, the Act requires the CEO to ensure that the rights of all parties are preserved, with no disadvantages or liabilities imposed by the TCO on actions taken before its registration, as specified in section 269S(1).
Breaching the provisions of the Customs Act 1901 may lead to various civil and criminal consequences. For instance, section 269SJ specifies that certain goods cannot be the subject of a TCO, and any attempt to circumvent these provisions could result in penalties. The Act does not explicitly state maximum penalties but generally allows for fines and imprisonment under the relevant sections of the Crimes Act 1914 for serious breaches. Furthermore, any failure to comply with the notice and objection requirements set out in section 269K(1) may also attract sanctions. It is crucial for all parties to adhere to the statutory obligations to avoid these potential consequences.