EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0936637
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 Australia Pty Ltd applied for a TCO in respect of certain power tool pads on 28 September 2009.
Instrument
TCO No 0936637 was made on 11 December 2009. It declares that those certain power tool pads 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. 0936637 is taken to have come into force on 28 September 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. 0936637 was enacted under the Customs Act 1901 to address a specific gap in tariff concessions for certain imported goods. This legislation, introduced by the Parliament of Australia, facilitates the application process for Tariff Concession Orders (TCOs) that can reduce or eliminate customs duties on particular imported goods. The instrument was created in response to an application by Makita Australia Pty Ltd for tariff concessions on certain power tool pads, which was approved after a determination that no substitutable goods were produced in Australia. The TCO provides a zero percent duty rate for these goods, effective from the date of application, which in this case was 28 September 2009. The instrument aims to support the importing process by reducing financial burdens on importers and ensuring that no existing rights or liabilities are adversely affected by the tariff concessions.
Scope and Application
The Tariff Concession Instrument No. 0936637 under the Customs Act 1901 applies to the specific goods, namely certain power tool pads, which were the subject of an application by Makita Australia Pty Ltd. This legislation facilitates the application of a lower rate of customs duty to these goods, provided that no substitutable goods are produced in Australia. The instrument is effective from the date the application was lodged, 28 September 2009, and applies nationally across Australia, as per the Customs Act 1901. The instrument does not disadvantage any person by affecting their rights as they stood on the date of registration, nor does it impose any new liabilities on individuals or entities other than the Commonwealth. Any importers of these goods can benefit from this concession by applying for a refund of duty on goods imported since the commencement date. The scope of the Act is extended through subordinate instruments which may further define and regulate the application of tariff concessions.
Key Provisions
The Tariff Concession Order (TCO) No. 0936637, under section 269F of the Customs Act 1901, facilitates a reduced rate of customs duty for certain power tool pads. Specifically, section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that no substitutable goods are produced in Australia, a written order (a TCO) must be issued. This instrument, which came into force on 28 September 2009, declares that these power tool pads are subject to a zero percent duty rate, rather than the general 5% duty rate specified in Schedule 4 of the Customs Tariff Act 1995. This concession is applicable from the date of the application under section 269S(1), ensuring that importers can benefit from the tariff reduction.
The Act imposes certain obligations on both the CEO and applicants. Under section 269C, the CEO must evaluate whether the application meets the core criteria, which include ensuring that no substitutable goods are produced in Australia on the application date, as per section 269D and section 269E definitions. The CEO is also required to publish a notice in the Gazette, inviting any interested parties to submit reasons against the TCO, as outlined in section 269K(1). In the case of TCO No. 0936637, no submissions were received, leading to the issuance of the order. Additionally, section 269SJ stipulates that certain goods cannot be subject to a TCO, and applicants must ensure their goods do not fall under this exclusion.
Failure to comply with the provisions of the Customs Act 1901 or any related regulations may result in legal consequences. While the explanatory statement does not detail specific offences or penalties for non-compliance with the TCO provisions, breaches of the Customs Act can generally lead to substantial penalties. For instance, section 238 of the Customs Act outlines various offences, including fraudulent importation, which can result in fines and imprisonment. The penalties can vary depending on the severity of the offence, with maximum fines reaching up to $220,000 for individuals and $1,100,000 for corporations, in addition to potential imprisonment terms. Thus, adherence to the Act's provisions is crucial to avoid these severe repercussions.