EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0912435
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.
Rehau Pty Ltd applied for a TCO in respect of certain compression tool kits on 15 April 2009.
Instrument
TCO No 0912435 was made on 10 July 2009. It declares that those certain compression tool kits 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. 0912435 is taken to have come into force on 15 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, enacted by the Commonwealth Parliament, provides a framework for the regulation of customs duties, including the establishment of Tariff Concession Orders (TCOs) as a means to reduce duty on certain goods. The introduction of this Act aimed to address the need for targeted relief on specific goods that could not be produced domestically or were otherwise disadvantaged in the market due to higher customs duties. The Explanatory Statement outlines that Tariff Concession Instrument No. 0912435 was introduced to provide a concession for certain compression tool kits, reducing their customs duty rate to zero. This was achieved after Rehau Pty Ltd applied for a TCO, which was subsequently approved by the Chief Executive Officer of Customs after a determination that no substitutable goods were produced in Australia. The policy objective was to ensure that such tariff concessions did not disadvantage existing rights or impose new liabilities on non-Commonwealth entities, while potentially benefiting importers by allowing them to seek refunds on duties paid prior to the TCO's effective date.
Scope and Application
The Tariff Concession Instrument No. 0912435, made under the Customs Act 1901, applies to certain compression tool kits which have been granted a tariff concession order (TCO) by the Chief Executive Officer of Customs. This legislation pertains specifically to goods that are subject to a TCO application, ensuring that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. The Act applies to the person or entity that applied for the TCO, namely Rehau Pty Ltd in this case, and to the specific goods identified in the application. The TCO provides a concession by setting the rate of duty on these goods to free, which contrasts with the general rate of 5% as per item 50 of Schedule 4 to the Customs Tariff Act 1995. The application of this Act is jurisdictional, operating under the Commonwealth's purview, and it does not extend to goods specified in section 269SJ of the Customs Act 1901, which are ineligible for TCOs. The TCO does not impose any new liabilities and does not affect the rights of any person other than the Commonwealth, ensuring that any pre-existing rights remain intact. The instrument came into force on the day the application was lodged, 15 April 2009, and any importers of these goods can apply for a refund of duty from that date.
Key Provisions
The Tariff Concession Instrument No. 0912435 under the Customs Act 1901 (section 269F) outlines the process and conditions for applying for a Tariff Concession Order (TCO) for certain goods. The key operative sections of this instrument are sections 269C, 269B, 269D, 269E, 269P(3), 269K(1), and 269S(1). Section 269C requires that a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Definitions for 'substitutable goods' and 'ordinary course of business' are provided in sections 269B, 269D, and 269E. If the Chief Executive Officer of Customs (CEO) is satisfied that the application meets these criteria, they must make a written order (TCO) as outlined in section 269P(3). Publication of the TCO application in the Gazette is mandated by section 269K(1), inviting any objections, although none were received for this TCO. Finally, section 269S(1) specifies that the TCO comes into force on the day the application was lodged, which was 15 April 2009 for this particular TCO.
Entities or individuals applying for a TCO must ensure their application meets the core criteria specified in section 269C. This involves demonstrating that no substitutable goods were produced in Australia on the application date, as defined in sections 269B, 269D, and 269E. Additionally, the CEO is required to publish the application in the Gazette under section 269K(1) and consider any submissions received. The applicant must also be aware that the TCO will only affect the rights of persons from the date of registration and will not impose any liabilities on anyone under section 269S(1). Importers, however, can benefit from the TCO by applying for a refund of duty on goods imported since the TCO came into force.
Breach of the conditions specified in the Tariff Concession Instrument No. 0912435 could lead to various civil or criminal consequences. Although specific offences and penalties are not detailed in the explanatory statement, under the Customs Act 1901, non-compliance with customs regulations can result in penalties. These penalties may include fines and imprisonment, depending on the severity of the breach. For instance, providing false information in a TCO application could lead to criminal charges. Furthermore, any party found to be improperly benefiting from the TCO by evading duties could face additional penalties or legal action. The specifics of these penalties would be governed by the broader provisions of the Customs Act 1901 and associated regulations.