EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0938686
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.
Jasco Pty Ltd applied for a TCO in respect of certain drawing instruments on 14 October 2009.
Instrument
TCO No 0938686 was made on 30 December 2009. It declares that those certain drawing instruments 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. 0938686 is taken to have come into force on 14 October 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. 0938686 was enacted under the Customs Act 1901 to address the specific issue of applying lower rates of customs duty to goods that meet certain criteria, thereby facilitating more affordable access to these goods for Australian consumers and businesses. The instrument was introduced by the Chief Executive Officer of Customs, who is mandated to make Tariff Concession Orders (TCOs) under Part XVA of the Act. The policy objective is to ensure that goods subject to TCOs are not substitutable by locally produced alternatives, thereby promoting economic efficiency and supporting industries where local production is not feasible or competitive. The instrument became effective on the date the application was lodged, 14 October 2009, and it provides relief by setting the duty rate to zero for certain drawing instruments previously subject to a 5% duty rate. Importantly, the TCO does not retroactively affect the rights of any party other than the Commonwealth, ensuring that it does not impose any liabilities or disadvantage existing stakeholders.
Scope and Application
The Tariff Concession Instrument No. 0938686, made under the Customs Act 1901, applies to the specific goods identified in the instrument, namely certain drawing instruments, for which Jasco Pty Ltd applied for tariff concessions. The instrument is effective from the date of application, 14 October 2009, and applies to the goods specified in item 50 of Schedule 4 to the Customs Tariff Act 1995, providing a tariff concession that reduces the general rate of duty from 5% to free. This Act applies to individuals or entities that import these particular drawing instruments, thereby impacting the import duties for these goods. The instrument's jurisdictional reach is Commonwealth, as it is made under the Customs Act 1901, which is a federal Act. There are no exclusions or exemptions specified in the explanatory statement, and no additional thresholds beyond the core criteria outlined in the Act are mentioned. The scope of the instrument is limited to the specific goods mentioned and does not extend to other goods unless they meet the same criteria and are the subject of a separate application.
Key Provisions
The Tariff Concession Instrument No. 0938686 under the Customs Act 1901, as outlined in the Explanatory Statement, sets out the conditions and provisions for the application and approval of a Tariff Concession Order (TCO). Under section 269F (3), an application for a TCO may be made by any person to the Chief Executive Officer of Customs (CEO) if the goods in question are not those specified in section 269SJ, which are ineligible for a TCO. Section 269C specifies that the application meets the core criteria if, on the day of the application, no substitutable goods were produced in Australia in the ordinary course of business. Furthermore, the definitions provided in sections 269B, 269D, 269E, and 269P clarify the terms necessary to assess the eligibility of the goods for the concession.
The obligations imposed by the Act on parties involved in a TCO application require the CEO to assess the application against the core criteria and publish a notice in the Gazette inviting submissions from interested parties. If no objections are raised, and the CEO is satisfied that the application meets the core criteria, a TCO is issued, as mandated by section 269P(3). This process ensures that the goods subject to the TCO are not being replaced by domestic production and that the concession is granted fairly.
Breaching the conditions set forth by the Customs Act 1901 can result in civil and criminal consequences. While the specific penalties for such breaches are not detailed in the Explanatory Statement, the Act generally provides for fines and imprisonment for offences related to customs duty and the illegal importation of goods. The severity of the penalties can vary based on the nature and extent of the breach, but the overarching aim is to maintain the integrity of the customs duty system and ensure compliance with the legislative provisions.