EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0832485
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 applied for a TCO in respect of certain nickel cadmium accumulator battery packs on 24 September 2008.
Instrument
TCO No 0832485 was made on 12 December 2008. It declares that those certain nickel cadmium accumulator battery packs 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. 0832485 is taken to have come into force on 24 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. 0832485, enacted in 2008 under the Customs Act 1901, aims to address the issue of providing tariff concessions for specific goods to ensure they are competitively priced in the Australian market. This legislation was introduced by the Australian Parliament to facilitate the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. The primary policy objective of this Act is to enable the application for reduced customs duties on imported goods, provided that no substitutable goods are produced in Australia, thus promoting fair trade and economic efficiency. The instrument in question specifically pertains to certain nickel cadmium accumulator battery packs, for which the general customs duty rate is reduced to zero under the prescribed tariff schedule, benefiting importers by potentially allowing them to claim refunds for duties paid on these goods since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0832485 under the Customs Act 1901 applies to specific goods, namely certain nickel cadmium accumulator battery packs, which are eligible for a concession on customs duty. This applies to any individual or entity importing these particular battery packs into Australia, allowing them to benefit from a zero rate of duty instead of the general rate of 5%. The application of this concession is determined by the Chief Executive Officer of Customs, who must be satisfied that no substitutable goods are produced in Australia. The concession does not affect the rights of any person, except the Commonwealth, in terms of any actions or omissions before the registration date of the Tariff Concession Order. The geographic scope of this legislation is national, as it pertains to customs duties across Australia. The Act does not specify any exclusions or exemptions beyond those goods listed in section 269SJ, which are ineligible for a Tariff Concession Order. Any further application or interpretation of the Act can be extended through subordinate instruments, which may provide additional definitions or operational guidelines.
Key Provisions
The Customs Act 1901 provides a framework for the creation of Tariff Concession Orders (TCOs) under section 269F, which allow for a reduced rate of customs duty on certain goods. A TCO is issued by the Chief Executive Officer of Customs (CEO) when an application is made and the core criteria are met, as specified in sections 269C, 269D, and 269E. Section 269C requires that the goods subject to the application are not substitutable goods produced in Australia in the ordinary course of business at the time of the application. If the CEO is satisfied that these criteria are met, they must issue a written TCO order under section 269P(3). For instance, in TCO No. 0832485, the CEO granted a concession on certain nickel cadmium accumulator battery packs, reducing the duty from 5% to free.
The obligations under this legislation include the requirement for the CEO to consider any submissions made in response to a published notice in the Gazette, inviting objections to the TCO, as outlined in subsection 269K(1). In the case of TCO No. 0832485, no submissions were received. Additionally, the CEO must ensure that the TCO does not affect the rights of any person, except the Commonwealth, as at the date of registration, nor impose liabilities in respect of actions taken before the registration date, as stated in subsection 269S(1). This means that while the TCO provides benefits to importers, such as the ability to apply for duty refunds on imports since the effective date of the TCO under paragraph 126(1)(r) of the Regulations, it does not impose any new liabilities on individuals or entities.
Breaches of the provisions under the Customs Act 1901, particularly those concerning the incorrect application of a TCO or misrepresentation of facts in an application, may result in civil or criminal consequences. The penalties for such breaches can include fines and, in serious cases, imprisonment. The exact penalties are determined by other relevant sections of the Customs Act 1901 and associated regulations, which may include substantial monetary penalties for wilful misrepresentation or fraudulent activities. The severity of the penalty is contingent on the nature and extent of the breach, with the potential for significant financial and legal ramifications for those found in violation of the Act.