EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0837958
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 sprayers on 30 October 2008.
Instrument
TCO No 0837958 was made on 30 January 2009. It declares that those certain sprayers 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. 0837958 is taken to have come into force on 30 October 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 was enacted to provide for the regulation of the importation and exportation of goods, including the imposition and collection of customs duties. The Tariff Concession Instrument No. 0837958, made under the Act, was introduced to address the need for a mechanism by which tariff concessions could be granted on specific goods. This was intended to promote fair trade practices and provide economic benefits to businesses by reducing the cost of importing certain goods. The instrument was made by the Chief Executive Officer of Customs following an application by Makita (Australia) Pty Ltd for a tariff concession on certain sprayers. The policy objective, as outlined in the explanatory statement, was to ensure that the concession did not disadvantage any person other than the Commonwealth and did not impose any new liabilities. The instrument came into effect on the date the application was lodged, and importers of the affected goods are entitled to a refund of duty paid since that date.
Scope and Application
The Customs Act 1901, specifically through Part XVA, provides a framework for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that allow for reduced customs duty rates on certain goods. This mechanism applies to any individual or entity that wishes to import specific goods into Australia, provided that such goods do not fall under the categories specified in section 269SJ, which are ineligible for tariff concessions. The core criteria for granting a TCO, as outlined in section 269C, require that no substitutable goods are produced in Australia in the ordinary course of business on the date the application is lodged. The CEO must also consider the definitions of 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods' as provided in sections 269D, 269E, and 269F respectively. If the CEO determines that a TCO application meets these criteria, a written order is made under section 269P(3), specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applicable to the goods. For instance, in the case of Makita (Australia) Pty Ltd, a TCO was issued for certain sprayers, resulting in a tariff rate of free instead of the general rate of 5%. The application of this Act extends across the Commonwealth of Australia, with the TCO coming into force on the date the application is lodged, as per section 269S(1). The CEO is also mandated to publish a notice in the Gazette inviting submissions against the TCO application, although no submissions were received for this particular TCO.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0837958 under the Customs Act 1901 (section 269F) allow for the application of tariff concessions on certain goods by the Chief Executive Officer of Customs (section 269P). Specifically, section 269C outlines the core criteria that must be met for a tariff concession order (TCO) to be granted. This includes ensuring that no substitutable goods are produced in Australia at the time of application (section 269D). If these criteria are met, the CEO must then issue a TCO, which declares that the specified goods are subject to a reduced rate of customs duty (section 269P(3)). In this case, the TCO No. 0837958 declares that certain sprayers are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, resulting in a duty-free rate for these goods (section 269S).
The Act imposes several obligations and requirements on the parties involved. Firstly, applicants such as Makita (Australia) Pty Ltd must ensure that their applications meet the core criteria, particularly that no substitutable goods are produced in Australia (section 269C). The CEO is required to consider the application and make a decision within a reasonable timeframe (section 269P). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties and consider these submissions before making a decision (section 269K(1)). The CEO is also obligated to ensure that the TCO does not disadvantage any person other than the Commonwealth or impose liabilities for actions taken prior to the TCO's registration (section 269S(1)).
In terms of offences, penalties, or consequences for breaches, the Customs Act 1901 does not explicitly state penalties for non-compliance with TCO provisions. However, failure to adhere to the criteria for issuing a TCO or misrepresentation in an application could potentially lead to the revocation of the TCO and the imposition of retrospective duties. The Customs Act 1901 also provides for various other penalties and enforcement actions under different sections for broader breaches of customs regulations, which could apply if the TCO is misused or if there is non-compliance with other customs laws. These penalties can include fines and imprisonment, as outlined in the Customs Act 1901 and the Crimes Act 1914.