EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1048156
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.
Hagemeyer Brands Australia applied for a TCO in respect of certain battery packs on 28 October 2010.
Instrument
TCO No 1048156 was made on 17 January 2011. It declares that those certain battery packs 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. 1048156 is taken to have come into force on 28 October 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 Australian Parliament, provides a framework for the regulation of imports and exports, including the imposition of customs duties. Specifically, Part XVA of the Act allows for Tariff Concession Orders (TCOs) which can reduce or eliminate customs duty on certain goods. The primary purpose of this legislation is to address the economic disadvantages faced by Australian importers who may not have domestic alternatives to imported goods, thereby potentially giving rise to higher costs and less competitive pricing for consumers. The explanatory statement for Tariff Concession Instrument No. 1048156, made under the Customs Act, illustrates this process by detailing the application of Hagemeyer Brands Australia for a TCO on certain battery packs. The instrument was issued on 17 January 2011, reducing the duty on these goods from 5% to free, effective from 28 October 2010, the date of the application. The policy objective here is to ensure that importers of specified goods are not disadvantaged by the absence of Australian-produced alternatives, thus facilitating fairer trade practices and potentially lowering costs for consumers.
Scope and Application
The Tariff Concession Instrument No. 1048156 applies to specific goods, namely certain battery packs, as determined by the Chief Executive Officer of Customs (CEO) under the Customs Act 1901. This instrument was enacted in response to an application by Hagemeyer Brands Australia on 28 October 2010, which sought a tariff concession order (TCO) for these goods. If the CEO determines that the application for a TCO meets the core criteria, including the absence of substitutable goods produced in Australia, a TCO is issued. This instrument provides tariff concessions, reducing the duty on these battery packs from 5% to free, effective from the date of the application, 28 October 2010. The application of this instrument is limited to the goods specified in the order, and it does not affect the rights of any person other than the Commonwealth, nor does it impose any liabilities on anyone. The CEO must publish a notice inviting submissions on the TCO application, although no submissions were received for this particular order.
Key Provisions
The Tariff Concession Instrument No. 1048156 under the Customs Act 1901 applies a lower rate of customs duty to certain battery packs, reducing the general rate of 5% to zero (sections 269C, 269P(3)). This instrument was made in response to an application by Hagemeyer Brands Australia on 28 October 2010, which was subsequently approved by the Chief Executive Officer of Customs (CEO) on 17 January 2011, after confirming that no substitutable goods were produced in Australia (section 269SJ). The instrument specifically declares that these battery packs are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved. Firstly, any person may apply to the CEO for a Tariff Concession Order (TCO) in respect of goods (section 269F). The CEO must then determine whether the application meets the core criteria, which include ensuring that no substitutable goods were produced in Australia at the time the application was lodged (section 269C). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). In this case, no submissions were received, and the TCO was made effective from the date the application was lodged, 28 October 2010 (subsection 269S(1)).
The legislation does not impose any liabilities on any person in respect of actions taken before the TCO was registered, ensuring that the rights of importers are beneficially affected (paragraph 126(1)(r) of the Regulations). Importers can apply for a refund of duty on goods imported since the TCO came into force. However, failure to comply with the requirements of the Act may lead to civil or criminal consequences. While the explanatory statement does not detail specific penalties, breaches of the Customs Act 1901 generally may result in fines, imprisonment, or both, depending on the severity and nature of the offence. The maximum penalties can vary significantly based on the specific provisions breached and the discretion of the court.