EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0844020
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.
Beaver Brands applied for a TCO in respect of certain screwdrivers on 16 December 2008.
Instrument
TCO No 0844020 was made on 06 March 2009. It declares that those certain screwdrivers 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. 0844020 is taken to have come into force on 16 December 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 facilitate trade by regulating the import and export of goods through the imposition of customs duties. The Act was introduced to address the need for a structured approach to managing international trade, ensuring compliance with tariff regulations, and protecting domestic industries. The Tariff Concession Instrument No. 0844020, made under this Act, was introduced by the Chief Executive Officer of Customs in response to an application by Beaver Brands for tariff concessions on certain screwdrivers. The instrument was designed to provide tariff relief where it was determined that no substitutable goods were produced in Australia, thus ensuring that the concessions do not disadvantage domestic producers. The primary policy objective of this instrument is to facilitate the import of specified goods at a reduced duty rate, benefiting importers and ensuring competitive pricing in the market without adversely impacting local production.
Scope and Application
The Tariff Concession Instrument No. 0844020 under the Customs Act 1901 applies to specific goods, namely certain types of screwdrivers, that are subject to a Tariff Concession Order (TCO). The Act allows for the application of a lower rate of customs duty on goods specified in a TCO, provided that no substitutable goods are produced in Australia in the ordinary course of business. The instrument was applied to the particular screwdrivers in question after the CEO of Customs was satisfied that the core criteria were met and no substitutable goods were produced domestically. The application of the TCO is limited to the specific goods identified and does not affect any existing rights or impose liabilities on any person other than the Commonwealth, particularly benefiting importers who can seek refunds for duties paid on these goods since the effective date of the TCO. The geographic scope of this legislation is national, operating within the framework of the Customs Act 1901, which is a Commonwealth Act. The application of the TCO may be extended or restricted through subordinate instruments as necessary.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0844020, under the Customs Act 1901, concern the application process for Tariff Concession Orders (TCOs), the criteria for making such orders, and the effects of these orders on the goods they cover. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided these goods are not excluded under section 269SJ. Section 269C stipulates that an application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged, as defined by sections 269D, 269E, and 269F. If the CEO is satisfied that the application meets these criteria, they must make a written order under section 269P(3) declaring the goods to which the TCO applies. In this specific case, TCO No. 0844020 was issued on 6 March 2009, declaring that certain screwdrivers are subject to a TCO, with the rate of duty being free, as opposed to the general rate of 5%.
The obligations imposed by the Act on the parties involved primarily concern the application and decision-making process for TCOs. The applicant must ensure their application meets the criteria set out in section 269C, including the absence of substitutable goods produced in Australia. The CEO is required to evaluate the application against these criteria and, if satisfied, to issue a TCO. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. In this instance, the CEO did not receive any submissions. The CEO must also ensure that the TCO does not adversely affect the rights of persons other than the Commonwealth and does not impose liabilities in respect of actions taken before the TCO's registration.
The Act does not explicitly outline specific offences or penalties for breaches related to TCOs, but general provisions of the Customs Act 1901 and the Customs Regulations 1993 would apply to any breaches. For instance, under section 250 of the Customs Act 1901, offences related to the importation or exportation of goods may incur penalties, including fines and imprisonment. If a person makes a false or misleading statement in an application for a TCO, they could face criminal penalties. Civil penalties may also apply for non-compliance with customs laws, potentially including fines up to the maximum specified in the applicable regulations. The exact penalties would depend on the nature and severity of the breach, and would be determined by the courts.