EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1119243
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.
Positec Australia Pty Ltd applied for a TCO in respect of certain hand tool sets on 15 June 2011.
Instrument
TCO No 1119243 was made on 05 September 2011. It declares that those certain hand tool sets 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. 1119243 is taken to have come into force on 15 June 2011.
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 a framework for the administration of customs and excise duties, including the ability to grant tariff concessions on certain goods through the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). The Act aims to facilitate trade by reducing the cost of imported goods that do not have Australian-made equivalents. Instrument No. 1119243, issued under the authority of the Customs Act, addresses the specific need of Positec Australia Pty Ltd by granting a tariff concession on certain hand tool sets, thereby setting the duty rate to zero. This measure is designed to benefit importers by potentially allowing them to claim a refund for duties paid on these goods imported since the effective date of the concession. The instrument came into force on the date the application was lodged, 15 June 2011, and does not affect the rights of any person as at the date of registration, nor does it impose any liabilities.
Scope and Application
The Tariff Concession Instrument No. 1119243 under the Customs Act 1901 applies specifically to certain hand tool sets for which Positec Australia Pty Ltd made an application on 15 June 2011. This instrument was issued by the Chief Executive Officer of Customs following an assessment that no substitutable goods were produced in Australia on the date the application was lodged, thus meeting the core criteria as per section 269C of the Act. By this instrument, the CEO has declared that the specified hand tool sets are subject to a lower rate of customs duty, in this case, a rate of duty that is free, as opposed to the general rate of 5% applicable to such goods. This concession does not extend to any goods specified in section 269SJ of the Act, which are ineligible for tariff concessions. The instrument's effects are jurisdictional in nature, applying across the Commonwealth of Australia, and it does not disadvantage any person by imposing liabilities for actions taken prior to its registration. The instrument came into force on the date the application was lodged, 15 June 2011, and allows for the potential refund of duties paid on these goods since that date, benefiting importers.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 1119243, which is a part of the Customs Act 1901, pertain to the creation and implementation of Tariff Concession Orders (TCOs). Specifically, section 269F allows an individual to apply to the Chief Executive Officer of Customs (CEO) for a TCO in relation to goods. If the application does not involve goods that are ineligible as specified in section 269SJ, the CEO is obligated to determine whether the application meets the core criteria outlined in section 269C. If the CEO is satisfied that the application meets these criteria, they must issue a written order (TCO) that specifies the applicable tariff item, as provided under section 269P(3).
The obligations imposed by the Act on the parties involved, particularly the CEO, include accepting valid TCO applications and ensuring that the goods specified in the application meet the core criteria, as outlined in section 269C. This involves verifying that no substitutable goods were produced in Australia on the day the application was lodged, as defined in sections 269D and 269E. Additionally, the CEO must publish a notice in the Gazette, inviting any interested parties to submit objections to the TCO, as stipulated in section 269K(1).
In terms of penalties and consequences, the Act does not explicitly mention any specific offences, penalties, or civil/criminal consequences for breaches related to TCO applications. However, it is clear from the explanatory statement that failure to comply with the conditions set out in the Act could potentially result in legal ramifications. For example, if the CEO fails to properly assess an application or incorrectly issues a TCO, this could lead to legal disputes or administrative penalties. Moreover, any person who intentionally contravenes the provisions of the TCO or the Customs Act may be subject to the general penalties applicable under the Act, which could include fines or imprisonment, depending on the severity of the breach.