EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0900155
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.
Techtronic Industries applied for a TCO in respect of certain biscuit joiner on 09 January 2009.
Instrument
TCO No 0900155 was made on 03 April 2009. It declares that those certain biscuit jointer 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. 0900155 is taken to have come into force on 09 January 2009.
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. 0900155, issued under the Customs Act 1901, was enacted to address the issue of applying tariff concessions to specific imported goods, thereby promoting trade efficiency and economic benefits. The instrument was introduced to provide a mechanism whereby the Chief Executive Officer of Customs can grant tariff concessions to imported goods that meet certain criteria, specifically where no substitutable goods are produced in Australia. This initiative was aimed at supporting industries by reducing customs duty on certain imported items, facilitating smoother trade processes and potentially lowering costs for businesses importing these goods.
The instrument was developed and issued by the Commonwealth Government, following a submission by Techtronic Industries, and came into effect on 9 January 2009. It specifies that certain biscuit joiners will be subject to a free rate of duty as opposed to the general 5% duty, provided no objections were raised during the public consultation period. The instrument's commencement date aligns with the date of the application, ensuring that any duties paid on imports of these goods since that date can be refunded to importers. This legislative measure aims to support trade by reducing the financial burden on importers of specified goods.
Scope and Application
The Tariff Concession Instrument No. 0900155, made under the Customs Act 1901, applies to certain biscuit joiners and specifically to the person or entity that applied for the concession, Techtronic Industries, concerning these goods. The instrument reduces the duty on these goods from the general rate of 5% to free, provided that no substitutable goods were produced in Australia on the date the application was lodged. The geographic reach of this Act is national, as it is administered by the Commonwealth through the Chief Executive Officer of Customs. Any person or entity importing these goods into Australia after the effective date of the application (9 January 2009) will benefit from the reduced duty rate. However, the Act explicitly excludes any goods specified in section 269SJ of the Customs Act 1901, which are not eligible for tariff concessions. Additionally, the Act does not affect any rights or impose liabilities on persons other than the Commonwealth concerning actions taken before the registration of the TCO. The application and scope of the TCO may be further extended or restricted through subordinate instruments under the Customs Act 1901.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 0900155 under the Customs Act 1901, pertain to the creation and application of Tariff Concession Orders (TCOs). Section 269F allows for an application to be made to the Chief Executive Officer (CEO) of Customs for a TCO concerning certain goods. Section 269C sets the core criteria that must be satisfied for a TCO application to be considered valid, namely that no substitutable goods were produced in Australia at the time of application. If these criteria are met, section 269P(3) requires the CEO to issue a TCO, which specifies the reduced rate of customs duty applicable to the goods in question.
Under this Act, the CEO is obligated to ensure that any TCO application complies with the specified criteria. If an application is deemed to meet these criteria, as in the case of Techtronic Industries’ application for a TCO on certain biscuit jointers on 9 January 2009, the CEO must make a written order, as per section 269P(3). This process is further governed by section 269K(1), which mandates that the CEO must invite public submissions on the application as soon as practicable, although no submissions were received in this instance. The TCO is considered effective from the date the application was lodged, as per subsection 269S(1).
Should there be any breaches of the conditions set forth by the TCO or the Customs Act, the consequences can be significant. The Act does not explicitly state penalties for breaches; however, violations of customs regulations generally can lead to civil or criminal penalties, including fines and imprisonment. The specific penalties would depend on the nature and severity of the breach, as outlined in the broader customs legislation and related Acts.