EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0911985
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 Pty Ltd applied for a TCO in respect of certain planer blades on 08 April 2009.
Instrument
TCO No 0911985 was made on 29 June 2009. It declares that those certain planer blades 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. 0911985 is taken to have come into force on 08 April 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 Customs Act 1901 was enacted by the Australian Parliament to provide a comprehensive framework for the administration of customs duties and other import-related taxes. The Act was introduced to address the need for a structured system to regulate the import of goods into Australia, ensuring that duties are collected correctly and efficiently while facilitating legitimate trade. One of the mechanisms under this Act is the creation of Tariff Concession Orders (TCOs) which can be applied for by individuals or entities to lower the customs duty on certain goods. The explanatory statement for Tariff Concession Instrument No. 0911985, enacted in 2009, outlines the process and criteria for granting such concessions, with the policy objective being to reduce the duty burden on goods where no substitutable Australian-made alternatives exist. This particular instrument was introduced to benefit Makita Pty Ltd by granting them a concession on certain planer blades, reducing their duty from 5% to free.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines the process by which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO) to apply a lower rate of customs duty on certain goods. This Act applies to any person or entity that wishes to apply for a TCO, and it pertains to goods that meet the core criteria set out in the Act. Notably, the Act does not apply to goods specified in section 269SJ, which are those that cannot be subject to a TCO. The application process requires that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged, as stipulated in section 269C. The CEO's decision to grant a TCO is subject to the conditions outlined in the Customs Tariff Act 1995, where the specific rate of duty is prescribed. The instrument in question, TCO No 0911985, was made on 29 June 2009, and it came into effect on 8 April 2009, the date the application was lodged. This TCO exempts certain planer blades from the general 5% duty, applying a zero rate instead, benefiting importers who can seek refunds for duties paid on these goods imported since the TCO's effective date.
Key Provisions
The key provisions of this legislation revolve around the process and criteria for establishing a Tariff Concession Order (TCO) under section 269F of the Customs Act 1901. Specifically, section 269C establishes that for a TCO application to be considered, it must meet core criteria, which are satisfied if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. This criterion is defined in further detail by sections 269B and 269D, which specify the meanings of 'goods produced in Australia' and 'ordinary course of business', respectively. Once the CEO is satisfied that these core criteria are met, section 269P(3) mandates the CEO to issue a written TCO order.
This Act imposes several obligations on both the applicant and the CEO. For the applicant, it is necessary to submit an application to the CEO, ensuring that it pertains to goods that are not listed in section 269SJ of the Act, which outlines those goods ineligible for a TCO. The CEO, on the other hand, must review the application to ensure it meets the core criteria stipulated in section 269C. Additionally, the CEO is obligated to publish a notice in the Gazette, inviting any interested parties to lodge submissions if they believe the TCO should not be made, as per subsection 269K(1) of the Act. The CEO must then consider any submissions received before making a final decision.
Failure to comply with the provisions of the Customs Act 1901 and the related regulations can result in various consequences. While the explanatory statement does not explicitly mention penalties for non-compliance, it is reasonable to infer that breaches of the Act or its regulations could lead to civil or criminal penalties as prescribed by the Customs Act and the Crimes Act 1914. The specific penalties would depend on the nature and severity of the breach but could potentially include fines or imprisonment. For instance, under the Crimes Act, significant breaches might attract penalties up to a maximum of $22,000 for individuals and $110,000 for corporations, alongside other potential sanctions.
In summary, the legislation provides a structured process for applying and granting TCOs, ensuring that the interests of both applicants and the Commonwealth are considered. It outlines clear obligations for both parties involved and implies potential serious consequences for non-compliance, albeit without detailing specific penalties in this explanatory statement.