EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0942112
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.
Josco Group applied for a TCO in respect of certain handtool parts on 09 November 2009.
Instrument
TCO No 0942112 was made on 12 March 2010. It declares that those certain handtool parts 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. 0942112 is taken to have come into force on 09 November 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. 0942112 was enacted in 2010 under the Customs Act 1901 to provide tariff concessions for certain goods that meet specific criteria. This instrument was introduced to address the problem of ensuring that Australian businesses have access to essential goods at a lower cost when no substitutable products are available domestically. The Customs Act 1901 sets out the scheme for Tariff Concession Orders (TCOs) which are made by the Chief Executive Officer of Customs. The objective of the policy is to facilitate trade by reducing customs duties on goods where it is determined that no suitable Australian-made alternatives exist, thereby supporting the competitiveness of Australian businesses in the global market. The instrument was registered without any submissions against it, indicating a lack of opposition to the tariff concessions proposed.
Scope and Application
The Tariff Concession Instrument No. 0942112 under the Customs Act 1901 applies to entities or individuals who import certain handtool parts into Australia and who meet the core criteria specified in the Act. The instrument was made by the Chief Executive Officer of Customs, following an application from Josco Group on 09 November 2009, and came into effect on the same day. It grants a tariff concession that reduces the duty on these goods from the general rate of 5% to free. The scope of the instrument is limited to the goods specified in the application and does not affect any rights or impose any liabilities on persons other than the Commonwealth in relation to actions taken before the instrument's registration. Additionally, the instrument does not extend to goods that cannot be subject to a tariff concession order as specified in section 269SJ of the Act. The instrument operates under the broader framework of the Customs Act and the Customs Tariff Act 1995, and its application may be further defined or expanded by subordinate instruments.
Key Provisions
The main operative sections of this legislation are sections 269C, 269F, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the CEO is satisfied that the application meets the core criteria, which include the absence of substitutable goods produced in Australia (section 269C), the CEO must make a written TCO (section 269P). This order specifies that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, effectively applying a free rate of duty instead of the general rate (section 269S).
The obligations imposed by the Act on parties include the requirement for the CEO to make a written TCO if the application meets the core criteria. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (subsection 269K(1)). The TCO must also be deemed to have come into force on the date the application was lodged (subsection 269S(1)). Importers benefit from this TCO as they can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations).
Any breach of the requirements or obligations under this legislation may lead to civil or criminal consequences. However, the explanatory statement does not explicitly state any specific offences, penalties, or consequences for non-compliance. Generally, failure to comply with the provisions of the Customs Act 1901 could result in fines, imprisonment, or both, depending on the severity of the breach. The exact penalties would be determined by the relevant courts and would depend on the specific circumstances of the case. The statutory provisions and common law would apply to determine the appropriate sanctions for non-compliance.