EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0813984
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 Australia Pty Ltd applied for a TCO in respect of certain stainless steel screws on 20 June 2008.
Instrument
TCO No 0813984 was made on 12 September 2008. It declares that those certain stainless steel screws 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. 0813984 is taken to have come into force on 20 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 Customs Act 1901, enacted by the Australian Parliament, is the foundational legislation governing the regulation of imports and exports within Australia. Part XVA of the Act introduces a scheme allowing the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs), which apply a reduced rate of customs duty to specific goods. Enacted to address the problem of ensuring that Australian businesses have access to competitively priced imported goods where there is no domestic production, the Act provides a mechanism for tariff concessions to be granted when no substitutable goods are produced in Australia. The policy objective of this legislative framework is to facilitate fair and efficient trade practices by allowing for reduced duty rates on imported goods under certain conditions, thereby supporting economic competitiveness and consumer interests.
Scope and Application
The Customs Act 1901, through its Part XVA, provides the framework for the creation of Tariff Concession Orders (TCOs) which aim to provide a lower rate of customs duty on specified goods. This legislative instrument applies to individuals or entities that seek to benefit from reduced customs duties for particular goods by applying to the Chief Executive Officer of Customs. The application process hinges on the absence of substitutable goods being produced in Australia, as defined by the Act. The geographic and jurisdictional scope of this legislation is national, applying across Australia as a Commonwealth Act. The Act does not specify exclusions, but it does exclude certain goods from eligibility, as outlined in section 269SJ. The application of the Act can be further defined or clarified through subordinate instruments, such as regulations or further explanatory statements, which may provide additional criteria or procedural details. The TCO in question, No. 0813984, specifically pertains to certain stainless steel screws and came into effect from the date of the application, 20 June 2008, without retroactive imposition of liabilities or disadvantage to any party.
Key Provisions
The primary operative sections of this Tariff Concession Instrument, referenced as TCO No. 0813984, involve the granting of tariff concessions for certain stainless steel screws, specifically those outlined in item 50 of Schedule 4 to the Customs Tariff Act 1995 (paragraph 3). Under this instrument, these screws are granted a tariff concession, which means they will no longer be subject to the general rate of customs duty of 5%. Instead, the duty on these screws is set at free (paragraph 3). This concession applies from the date the application for the concession was lodged, which was 20 June 2008 (paragraph 6).
The obligations imposed on the parties by this Act include the requirement for the Chief Executive Officer (CEO) of Customs to consider applications for tariff concessions and to determine whether they meet the core criteria as outlined in sections 269C and 269F of the Customs Act 1901. Specifically, the CEO must ensure that the application is not in respect of goods specified in section 269SJ, which includes goods that are prohibited from receiving such concessions (paragraph 2). Additionally, the CEO must confirm that no substitutable goods were produced in Australia at the time the application was made (paragraph 4). If these conditions are met, the CEO must make a written order (paragraph 5).
There are no specific offences or penalties outlined in this particular Tariff Concession Instrument. However, any breach of the Customs Act 1901 could lead to various civil and criminal consequences, including fines and imprisonment, depending on the nature and severity of the breach. For instance, knowingly making a false statement in an application for a tariff concession could result in a fine of up to 10,000 penalty units or imprisonment for up to five years, or both (section 285-5 of the Crimes Act 1914). Furthermore, if an entity fails to comply with the terms of the concession, they could face financial penalties or other sanctions as determined by the relevant authorities.