EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0707304
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.
ITW Buildex applied for a TCO in respect of certain wire fastener on 16 May 2007.
Instrument
TCO No 0707304 was made on 7 August 2007. It declares that those certain wire fastener 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 0%.
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. 0707304 is taken to have come into force on 16 May 2007.
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. 0707304, enacted in 2007 under the Customs Act 1901, was introduced to address the need for a streamlined process to reduce customs duty on specific goods that are not produced in Australia, thus encouraging importation. This instrument was created to facilitate the application for Tariff Concession Orders (TCOs) by providing a mechanism through which businesses could apply for a concession on customs duties for goods that are not domestically produced. The Customs Act 1901, administered by the Commonwealth of Australia, aims to facilitate trade by reducing barriers such as customs duties where appropriate, thereby fostering economic growth. The policy objective behind this specific TCO was to ensure that businesses importing certain wire fasteners would not incur duty charges, thereby potentially lowering costs and increasing competitiveness in the market.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs (CEO), which apply lower rates of customs duty to certain goods. This Act applies to any person who wishes to apply for a TCO for goods that are not specified as ineligible under section 269SJ, and to any goods that meet the core criteria as outlined in section 269C, which includes the condition that no substitutable goods are produced in Australia in the ordinary course of business at the time the application is lodged. The geographic reach of this Act is national, affecting all Australian importers and exporters of goods subject to a TCO. The Act also mandates the CEO to publish notices in the Gazette inviting submissions from the public regarding the validity of a TCO application, although in this case no submissions were received. The commencement of the TCO is effective from the date of the application, and it does not retroactively affect any person's rights or impose any liabilities prior to the registration of the TCO. The Act allows for the expansion of its application through subordinate instruments, such as regulations, which can further specify the conditions under which a TCO may be applied or modified.
Key Provisions
The Customs Act 1901, particularly under Part XVA, outlines a process for Tariff Concession Orders (TCOs), which allow for a lower rate of customs duty on specific goods. Section 269F of the Act allows any person to apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning certain goods. If the application is not in respect of goods that are ineligible under section 269SJ, the CEO must then assess whether the application meets the core criteria specified in section 269C. This involves confirming that, on the date of the application, no substitutable goods were being produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. If these criteria are met, the CEO is mandated to issue a written order, which is the TCO, as per subsection 269P(3).
For the specific case of TCO No. 0707304, issued on 7 August 2007, the CEO was satisfied that the application for certain wire fasteners met the core criteria because no substitutable goods were being produced in Australia. This TCO declared that these wire fasteners are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a reduction of the duty rate from the general 5% to 0%. The application for this concession was lodged on 16 May 2007, and under subsection 269S(1) of the Act, the TCO is considered to have come into force on that date.
The Act imposes certain obligations on the CEO, primarily to ensure that the application process for a TCO is transparent and open to public scrutiny. Subsection 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any interested parties who might oppose the making of the TCO. In the case of TCO No. 0707304, no submissions were received in response to this notice. The rights of importers are positively affected by such TCOs, as they can apply for a refund of duty on goods imported since the effective date of the TCO, as per paragraph 126(1)(r) of the Regulations.
Offences and penalties for non-compliance with the Act are not explicitly detailed in the provided text, but general provisions of the Customs Act 1901 may apply. Penalties for breaches can include fines and, in severe cases, imprisonment. For instance, under section 269H of the Act, penalties for making a false or misleading statement in a TCO application can be substantial. The maximum penalties can vary, but they may include fines up to a certain amount or imprisonment for a specified term, depending on the nature and severity of the offence.