EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1018371
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.
Assa Abloy Australia Pty Ltd applied for a TCO in respect of certain padlocks on 22 April 2010.
Instrument
TCO No 1018371 was made on 09 July 2010. It declares that those certain padlocks 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. 1018371 is taken to have come into force on 22 April 2010.
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 for the regulation of customs and excise duties. Among its provisions, Part XVA of the Act establishes a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. The Tariff Concession Instrument No. 1018371, made on 9 July 2010, is an example of this scheme in action. This instrument was introduced to address the specific needs of Assa Abloy Australia Pty Ltd, which applied for a TCO for certain padlocks on 22 April 2010. The primary objective of the Tariff Concession Instrument No. 1018371 is to reduce the customs duty on the specified padlocks from the general rate of 5% to free, effective from the date of the application, 22 April 2010, in line with item 50 of Schedule 4 to the Customs Tariff Act 1995. The Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia at the time the application was lodged, thereby satisfying the core criteria under section 269C of the Act. The instrument does not affect any existing rights or impose new liabilities, and it allows for potential duty refunds for importers under the Customs Act.
Scope and Application
The Customs Act 1901, specifically Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to individuals or entities seeking tariff concessions for specific goods, ensuring that such applications comply with the criteria outlined in sections 269C, 269D, 269E, and 269SJ of the Act. These sections detail the conditions under which a TCO can be granted, such as the absence of substitutable goods produced in Australia and the exclusion of certain goods from eligibility. The Act's jurisdiction covers the Commonwealth of Australia, and it does not extend to state or territory laws. The TCO, once issued, benefits importers by allowing them to apply for a refund of duty on goods imported since the effective date of the concession, as per the Regulations under paragraph 126(1)(r). Notably, the TCO does not disadvantage any person or impose new liabilities, thereby safeguarding existing rights and obligations.
Key Provisions
The Customs Act 1901, specifically under Part XVA, outlines the framework for Tariff Concession Orders (TCOs). Section 269F (1) allows any person to apply to the Chief Executive Officer (CEO) of Customs for a TCO regarding certain goods. If the CEO is satisfied that the application does not pertain to goods listed in section 269SJ, which are ineligible for TCOs, the CEO must assess whether the application meets the core criteria specified in section 269C. A TCO application meets these criteria if, on the day it was lodged, no substitutable goods were being produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. If the CEO determines that the application meets the core criteria, a written order, or TCO, is made under section 269P(3), declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. This particular instrument, TCO No. 1018371, was made on 9 July 2010, and it applies to certain padlocks, which now attract a duty rate of free instead of the general rate of 5%.
The Act imposes several obligations on the parties involved. The CEO of Customs is required to consider each TCO application and decide whether it meets the core criteria. As per section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes that the TCO should not be made. Once a TCO is issued, the general public, including importers, are informed of the new tariff rates, which can influence their importation strategies. Additionally, importers may benefit from a refund of duty on goods imported since the effective date of the TCO, under paragraph 126(1)(r) of the Regulations.
Failure to comply with the requirements of the Customs Act 1901 can lead to various legal consequences. While specific offences and penalties are not detailed in the explanatory statement, breaches of the Act can generally result in both civil and criminal penalties. Civil penalties may include fines, whereas criminal penalties could involve imprisonment, depending on the severity and intent of the breach. The maximum penalties are not specified in this particular explanatory statement, but they would be determined by the relevant provisions of the Customs Act 1901 and any associated regulations. Ensuring compliance with the Act is crucial for all parties to avoid these potential repercussions.