EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1040548
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.
Metabo applied for a TCO in respect of certain wall chase cutters on 01 September 2010.
Instrument
TCO No 1040548 was made on 22 November 2010. It declares that those certain wall chase cutters 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. 1040548 is taken to have come into force on 01 September 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 Parliament of Australia, establishes a framework for the imposition and collection of customs duties on imported goods. The Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs to provide tariff relief on certain goods. This legislative instrument, F2010L03437, addresses the need to facilitate trade by reducing the customs duty on specific goods, in this case, certain wall chase cutters, where no substitutable goods are produced in Australia. The policy objective is to promote economic efficiency and competitiveness by lowering the cost of importing these goods, thereby benefiting importers and potentially consumers. Instrument TCO No. 1040548, made on 22 November 2010, applies a zero rate of duty to the specified wall chase cutters, effective from 1 September 2010, the date the application was lodged.
Scope and Application
The Tariff Concession Instrument No. 1040548 under the Customs Act 1901 applies specifically to the concession of customs duty for certain wall chase cutters imported into Australia. This concession was granted following an application by Metabo on 1 September 2010, and it came into effect on the same date. The application was processed by the Chief Executive Officer of Customs, who determined that no substitutable goods were being produced in Australia, thus meeting the core criteria set out in section 269C of the Act. As a result, the CEO issued the Tariff Concession Order (TCO) No. 1040548 on 22 November 2010, applying item 50 of Schedule 4 to the Customs Tariff Act 1995 to these goods and setting the duty rate at free, down from the general rate of 5%. This concession is confined to the particular goods specified in the TCO and does not extend to any other goods unless similarly qualified and approved under the Act. The application process included a public notice period in the Gazette for any objections, none of which were received. The TCO does not retroactively affect any pre-existing rights or liabilities, and it specifically benefits importers by allowing them to apply for duty refunds on imports made since the TCO's effective date.
Key Provisions
The main operative sections of this legislation revolve around the process and criteria for making Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows for applications to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. Section 269C sets out the core criteria for a TCO application, which must be met for the CEO to grant the concession. This includes the requirement that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (Section 269P(3)). Once the CEO is satisfied that these criteria are met, a TCO is issued, as seen in the case of Metabo’s application for certain wall chase cutters, resulting in Tariff Concession Order (TCO) No. 1040548.
The Act imposes several obligations on parties involved in the TCO process. The CEO is required to assess TCO applications against the core criteria and publish a notice in the Gazette inviting submissions from any interested parties (Section 269K(1)). In this case, no submissions were received, leading to the issuance of the TCO. The Act also mandates that a TCO comes into effect on the day the application is lodged (Section 269S(1)). Furthermore, the TCO ensures that it does not affect the rights of any person other than the Commonwealth in a way that would disadvantage them or impose liabilities for actions taken prior to the TCO's effective date.
Breaching the requirements or failing to comply with the provisions of the Act may have legal consequences. Although the specific penalties for non-compliance are not detailed in the explanatory statement, the Act generally provides for both civil and criminal penalties for breaches. Civil penalties may include fines or other monetary penalties as stipulated by the relevant legislation. Criminal penalties could potentially include imprisonment, particularly if the breach is deemed to be of a serious nature. The exact penalties would depend on the specifics of the breach and the applicable sections of the Customs Act 1901 and any related regulations.