EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0829956
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 reciprocationg staw kits on 08 September 2008.
Instrument
TCO No 0829956 was made on 28 November 2008. It declares that those certain reciprocationg staw 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. 0829956 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 Tariff Concession Instrument No. 0829956 was enacted in 2008 to provide relief on customs duties for specific goods, in this case, reciprocating saw kits. This instrument was created under the authority of the Customs Act 1901, specifically within Part XVA which outlines the scheme for Tariff Concession Orders (TCOs). These orders allow for a lower rate of customs duty to be applied to goods that meet certain criteria, thereby facilitating trade by reducing the cost burden on importers. The primary policy objective of this legislation is to support Australian businesses by ensuring they have access to competitively priced imported goods, which can enhance their operations and contribute to the broader economic interests of the nation. The instrument was introduced after Ozito Industries Pty Ltd applied for a TCO for reciprocating saw kits, and it came into force on the date the application was lodged, as per the provisions of the Customs Act 1901.
Scope and Application
The Tariff Concession Instrument No. 0829956, made under the Customs Act 1901, applies specifically to certain reciprocating saw kits, following an application by Ozito Industries Pty Ltd. This instrument pertains to the application of a lower rate of customs duty on these goods, as determined by the Chief Executive Officer of Customs (CEO) who found that no substitutable goods were produced in Australia on the date the application was lodged. The concession does not apply to any goods specified in section 269SJ of the Act, which includes those goods that are not eligible for a Tariff Concession Order (TCO). The CEO's decision to grant the TCO was made in accordance with the core criteria outlined in section 269C of the Act, ensuring that the goods in question did not have Australian-made substitutes. The TCO, which came into force on the date the application was lodged (08 September 2008), benefits importers by allowing them to apply for a refund of duty on goods imported since that date, without imposing any new liabilities on them.
Key Provisions
The Customs Act 1901, under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (s 269F). Section 269C outlines that a TCO application is eligible if, at the time of application, no substitutable goods are produced in Australia in the ordinary course of business. This is determined by the definitions provided in sections 269D (goods produced in Australia), 269E (ordinary course of business), and 269F (substitutable goods). If the CEO is satisfied that an application meets these criteria, they are required under subsection 269P(3) to issue a written order (TCO) specifying that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995, effectively applying a concessional rate of duty.
The CEO is also mandated by subsection 269K(1) to publish a notice in the Gazette after accepting a TCO application, inviting any interested party to submit reasons why the TCO should not proceed. In the case of TCO No. 0829956, no submissions were received. Under subsection 269S(1), the TCO is deemed to have come into effect on the date the application was lodged, in this case, 8 September 2008. The TCO does not affect any pre-existing rights or liabilities of any person, except for the Commonwealth, and it notably benefits importers by potentially allowing them to apply for a refund of duties on goods imported since the effective date of the TCO (s 126(1)(r) of the Regulations).
Entities and individuals governed by the Act are required to ensure compliance with the TCO provisions, particularly regarding the production and substitution of goods in Australia. Importers, in particular, must be aware of the concessional duty rates and the process for applying for a refund of duties paid prior to the TCO's effective date. The CEO must also adhere to the procedural requirements of publishing notices and considering submissions, even if none were received in this instance.
Failure to comply with the requirements of the Customs Act 1901 or the associated regulations may result in civil or criminal penalties. While the explanatory statement does not specify the exact penalties, breaches of customs laws generally carry significant financial penalties and potential criminal charges, including imprisonment, under the relevant sections of the Customs Act and other applicable legislation. The specific penalties would depend on the nature and severity of the breach, and would be determined by the courts.