EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0839279
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.
Robert Bosch Limited applied for a TCO in respect of certain dc electric motors 750 watts on 11 November 2008.
Instrument
TCO No 0839279 was made on 30 January 2009. It declares that those certain dc electric motors 750 watts 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. 0839279 is taken to have come into force on 11 November 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. 0839279 was enacted under the Customs Act 1901 to address the issue of providing tariff concessions for certain goods, thereby facilitating the importation of these goods under preferential conditions. This instrument was introduced to ensure that specific products, in this case dc electric motors 750 watts, can be imported without incurring the general customs duty rate, which otherwise stands at 5%. The Customs Act 1901, administered by the Parliament of Australia, aims to streamline trade processes and provide economic benefits by reducing tariffs on certain imported goods, thus encouraging trade and competition. The policy objective behind this particular Tariff Concession Order is to allow the importation of dc electric motors 750 watts free of the otherwise applicable customs duty, benefiting both importers and potentially end consumers by reducing the cost of these essential goods.
Scope and Application
The Tariff Concession Instrument No. 0839279, under the Customs Act 1901, applies specifically to goods that are the subject of a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs. This legislation facilitates the application of a lower rate of customs duty to goods specified in a TCO, provided the application meets the core criteria set out in the Act. The process begins with an application to the CEO by a person, which is assessed against the criteria that there are no substitutable goods produced in Australia in the ordinary course of business. For the purposes of this Act, substitutable goods refer to those produced in Australia that can be put to a use similar to that of the goods subject to the TCO application. In the case of Robert Bosch Limited, the CEO was satisfied that no substitutable goods for certain dc electric motors 750 watts were produced in Australia, resulting in the issuance of TCO No. 0839279 which applied a zero duty rate on these goods, down from the general rate of 5%.
Geographically, the application of this Act is national, as it pertains to the federal legislation of the Customs Act 1901, which governs customs duties across Australia. The Act’s application is not restricted by state or territory boundaries but rather extends across the Commonwealth. The exclusions are specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. No submissions were received in response to the Gazette notice published by the CEO, indicating no objections to the making of the TCO. The commencement of the TCO is effective from the date the application was lodged, ensuring that the rights of importers are beneficially affected from that date onwards.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0839279 are found under sections 269C, 269F, and 269P of the Customs Act 1901. Section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. The CEO must assess whether the application meets the core criteria outlined in section 269C, which includes ensuring that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the application meets these criteria, section 269P requires the CEO to issue a TCO, declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, with a specified rate of duty.
The obligations imposed by the Act on the parties involved are primarily on the CEO of Customs. The CEO must first verify that the application for a TCO is valid and not in respect of goods specified in section 269SJ of the Act, which are ineligible for a TCO. After accepting a valid application, the CEO must publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made. If no submissions are received, the CEO must then determine whether the application meets the core criteria, including confirming that no substitutable goods were produced in Australia on the day the application was lodged. If the application meets these criteria, the CEO is required to issue a TCO.
Any breach of the conditions set forth in the Customs Act 1901 or the Tariff Concession Instrument No. 0839279 may result in civil or criminal penalties. Under the Customs Act, individuals or entities that fail to comply with the Act or the TCO may be subject to fines or imprisonment. The maximum penalties for breaches of the Customs Act can be significant, depending on the nature and severity of the offence. Additionally, any misuse of a TCO, such as attempting to import goods under a TCO that do not qualify, may lead to further penalties, including the imposition of back duties and interest, as well as potential criminal charges. It is crucial for all parties to adhere to the provisions of the Act and the specific terms of any issued TCO to avoid these consequences.