EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0822939
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.
Stauff Corporation Pty Ltd applied for a TCO in respect of certain rail nut fasteners on 03 July 2008.
Instrument
TCO No 0822939 was made on 26 September 2008. It declares that those certain rail nut 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. 0822939 is taken to have come into force on 03 July 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 Parliament of Australia, provides a framework for the administration of customs duties and includes provisions for tariff concession orders (TCOs) which offer reduced customs duty rates on specific goods. The act was introduced to streamline the process for importers to access lower duty rates on certain goods that meet specific criteria. Specifically, the act allows the Chief Executive Officer of Customs to grant tariff concessions if the goods in question are not produced in Australia and there are no substitutable goods available domestically. Tariff Concession Instrument No. 0822939, made under this act, grants a tariff concession for certain rail nut fasteners, reducing the duty from 5% to free, effective from the date the application was lodged. The policy objective is to facilitate easier and cheaper access to essential goods that are not produced locally, thereby supporting trade and economic efficiency.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the issuance of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs. The Act applies to any person or entity seeking a tariff concession on goods that are not produced in Australia and for which there are no substitutable goods produced domestically. This means that any application for a TCO must meet the criteria of section 269C, which includes the absence of substitutable goods produced in Australia at the time of application. The Act extends its application across the Commonwealth of Australia, thereby affecting all states and territories uniformly. Notably, the Act excludes certain goods as specified in section 269SJ, which cannot be subject to a TCO. Once a TCO is issued, it applies retroactively from the date the application was lodged, without affecting any rights accrued before this date. The instrument also facilitates subordinate regulations, such as the Customs (Tariff Concessions) Regulations 2012, which further detail the administrative procedures and rights of parties involved.
Key Provisions
The main operative sections of this Tariff Concession Order (TCO) are sections 269C, 269F, 269P, and 269S of the Customs Act 1901, which set out the process and criteria for applying for and making a TCO. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. Section 269C specifies that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets the core criteria, section 269P requires the CEO to make a written order (a TCO) declaring that the goods subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. The TCO comes into force on the day the application was lodged, as per section 269S.
The obligations and requirements imposed by the Act on the parties or entities it governs include that the CEO of Customs must decide whether a TCO application meets the core criteria (section 269C). The CEO must also make a TCO if the application meets the criteria (section 269P). The CEO is required to publish a notice in the Gazette inviting submissions if there are reasons why the TCO should not be made (subsection 269K(1)). 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 in respect of anything done or omitted to be done before the date of registration (subsection 269S(2)).
The legislation does not explicitly state any offences, penalties, or civil or criminal consequences for breach. However, the failure to comply with the requirements of the Customs Act 1901 or the Customs Tariff Act 1995 may result in a range of civil or criminal penalties under those Acts. For example, section 198 of the Customs Act 1901 imposes a penalty of up to $10,500 or imprisonment for up to five years for knowingly or recklessly making a false statement or representation in relation to the importation or exportation of goods. Section 199 of the Act imposes a penalty of up to $21,000 or imprisonment for up to ten years for knowingly importing or exporting goods in contravention of the Act.