EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0813444
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.
Hilti Australia applied for a TCO in respect of certain adhesive anchors on 18 June 2008.
Instrument
TCO No 0813444 was made on 01 September 2008. It declares that those certain adhesive anchors 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. 0813444 is taken to have come into force on 18 June 2008.
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. 0813444 was enacted in 2008 under the Customs Act 1901. This legislation allows the Chief Executive Officer of Customs to grant tariff concessions to specified goods, reducing the rate of customs duty for those goods. This instrument was introduced to address the need for facilitating trade by lowering the duty rates on certain imported goods, provided they are not produced domestically and do not have substitutable alternatives. The Tariff Concession Order (TCO) No. 0813444 was made in response to an application by Hilti Australia for certain adhesive anchors, which were granted a zero duty rate as no substitutable goods were being produced in Australia. The instrument came into force on the date the application was lodged, 18 June 2008, and does not affect any pre-existing rights or impose any new liabilities, except for potential duty refunds for importers of the specified goods.
Scope and Application
The Customs Act 1901, specifically Part XVA, governs the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), who is responsible for deciding whether an application for a TCO meets the core criteria. This process allows for a lower rate of customs duty to be applied to goods that are subject to a TCO, provided that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. The application of a TCO is subject to the terms set out in Schedule 4 of the Customs Tariff Act 1995, and once a TCO is registered, it is taken to have come into force on the day the application was lodged, thereby benefiting importers by potentially allowing them to apply for a refund of duty on goods imported since the effective date of the TCO. The Act does not disadvantage or impose liabilities on any person other than the Commonwealth in respect of anything done or omitted to be done before the date of registration of the TCO.
Key Provisions
The key operative sections of Tariff Concession Instrument No. 0813444 under the Customs Act 1901 (sections 269C, 269F, 269P) establish the framework for the creation of Tariff Concession Orders (TCOs). Section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. Section 269C outlines the core criteria that must be met for an application to be considered valid, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, section 269P(3) mandates the CEO to issue a written TCO.
The obligations imposed by the Act on the parties governed by it are primarily centred around the application process and the conditions for eligibility for a TCO. An applicant must ensure their goods meet the core criteria, particularly the requirement that no substitutable goods were produced in Australia on the day the application was lodged. The CEO, on the other hand, is obligated to assess the application against these criteria, consult with the public as required by section 269K(1), and issue a TCO if the application meets the criteria. The CEO is also required to publish a notice in the Gazette inviting submissions from interested parties before making a decision on the application.
In terms of penalties and consequences, the Customs Act 1901 does not explicitly outline penalties for non-compliance with the TCO provisions. However, breaches of the Act or regulations generally can result in civil or criminal penalties, depending on the nature and severity of the breach. Civil penalties can include fines and other financial penalties, while criminal penalties may include imprisonment. The exact penalties are not specified in the explanatory statement but would be determined according to the relevant laws governing customs and tariffs.
Section 269S(1) states that a TCO comes into force on the day the application is lodged, which for TCO No. 0813444 was 18 June 2008. This means that from that date, the specified adhesive anchors became eligible for the tariff concession, which sets the duty rate at free instead of the general rate of 5%. Importantly, the TCO does not affect the rights of any person, other than the Commonwealth, in a way that would disadvantage them or impose new liabilities for actions taken before the TCO's effective date. Importers of the affected goods can apply for a refund of duty paid on goods imported since the TCO's effective date, as outlined in paragraph 126(1)(r) of the Regulations.