EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0714325
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.
Thomas & Betts Pty Ltd applied for a TCO in respect of certain plastic fasteners on 05 September 2007.
Instrument
TCO No 0714325 was made on 16 November 2007. It declares that those certain plastic fasteners 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. 0714325 is taken to have come into force on 05 September 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 Customs Act 1901 was enacted by the Australian Parliament to regulate the importation and exportation of goods, including the imposition of duties and taxes. This Act, through its Part XVA, introduced the scheme for Tariff Concession Orders (TCOs), allowing the Chief Executive Officer of Customs to grant tariff concessions on certain goods to stimulate economic activity and support industry development. The Tariff Concession Instrument No. 0714325, made on 16 November 2007, addresses the gap by providing a tariff concession for certain plastic fasteners applied for by Thomas & Betts Pty Ltd, as the CEO was satisfied that no substitutable goods were produced in Australia. This instrument ensures that the rights of importers are beneficially affected, allowing them to apply for a refund of duty on these goods from the date the TCO is taken to have come into force, without imposing any new liabilities.
Scope and Application
The Tariff Concession Instrument No. 0714325 under the Customs Act 1901 applies specifically to certain plastic fasteners as determined by Thomas & Betts Pty Ltd, who submitted an application for tariff concession. This instrument pertains to goods that are not substitutable by any goods produced in Australia, which was confirmed by the Chief Executive Officer of Customs (CEO). The geographic scope of this instrument is national, affecting customs duties across Australia as per the definitions and criteria outlined in the Customs Act. Importantly, the instrument does not affect the rights of any person other than the Commonwealth and does not impose any new liabilities, but it does provide beneficial tariff concessions to importers of the specified goods. The instrument came into effect on the date the application was lodged, which was 5 September 2007, and no objections were raised during the consultation period. Subordinate instruments may extend or modify the application of this TCO based on further determinations by the CEO.
Key Provisions
The primary operative sections of the Customs Act 1901, in the context of Tariff Concession Orders (TCOs), are sections 269C, 269F, 269K, and 269S. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided the goods are not specified in section 269SJ, which lists those goods that cannot be subject to a TCO. The CEO must then determine whether the application meets the core criteria, which are defined in sections 269C and 269B. If the application meets the core criteria, the CEO must make a written order, as specified in section 269P(3).
The Act imposes several obligations and requirements on the parties involved. The CEO must assess the validity of TCO applications to ensure they meet the core criteria. This involves verifying that no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. Additionally, the CEO is required to publish a notice in the Gazette, inviting submissions from any person who might object to the making of the TCO, as stipulated in subsection 269K(1). Failure to follow these procedures could result in the TCO being legally challenged.
Failure to comply with the provisions of the Customs Act 1901 can result in civil or criminal consequences. If an entity or individual does not adhere to the requirements for applying for or receiving a TCO, they may face penalties under the relevant sections of the Act. While the specific penalties are not detailed in the explanatory statement, breaches of customs regulations generally can result in fines and, in severe cases, imprisonment. The exact penalties would be determined based on the specific nature and severity of the breach.
The Tariff Concession Order No. 0714325, which applies to certain plastic fasteners, was made effective from the date the application was lodged, 05 September 2007. This order declares that these goods are subject to a duty rate of free, whereas the general rate of duty is 5%. This concession benefits importers who can now apply for refunds on duties paid on these goods since the effective date of the TCO, as provided under paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not affect the rights of any person as at the date of registration, nor does it impose any new liabilities on any person.