EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0840197
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.
Centor Australia Pty Ltd applied for a TCO in respect of certain bifold door drop bolts on 18 November 2008.
Instrument
TCO No 0840197 was made on 30 January 2009. It declares that those certain bifold door drop bolts 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. 0840197 is taken to have come into force on 18 November 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. 0840197, enacted in 2009, amends the Customs Act 1901 to provide tariff concessions for specific goods, in this case, certain bifold door drop bolts. This instrument was introduced to address the need for facilitating imports by providing lower customs duty rates for specific goods when no substitutable goods are produced in Australia. The instrument was enacted by the Australian Government and aims to provide economic benefits to importers by allowing them to apply for a refund of duties paid on such goods since the date the Tariff Concession Order (TCO) was deemed to have come into force. The Customs Act 1901 allows the Chief Executive Officer of Customs to make TCOs if certain criteria are met, including the absence of substitutable goods produced in Australia.
This instrument was developed following an application by Centor Australia Pty Ltd, which sought a tariff concession for their specific bifold door drop bolts. After determining that no substitutable goods were being produced in Australia, the CEO issued TCO No. 0840197, effective from 18 November 2008, the date the application was lodged. The TCO specifies that the general rate of duty on these goods is 5%, while the rate for goods subject to the concession is free. The instrument does not affect the rights of any person except to the benefit of importers who can now apply for a refund of duties paid on these goods.
Scope and Application
The Tariff Concession Instrument No. 0840197 applies to the specific category of goods, namely certain bifold door drop bolts, and is governed by Part XVA of the Customs Act 1901. This Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) which provide for a lower rate of customs duty on goods that are the subject of such orders. The Act applies to any person or entity that seeks to import these specific goods and benefits importers by potentially reducing their duty liabilities. The application of this Act is national in scope, as it is a Commonwealth Act and operates across all states and territories within Australia. The Act excludes certain goods from being eligible for a TCO, specifically those listed in section 269SJ of the Customs Act 1901. Additionally, the Act provides that a TCO will not affect the rights of any person, other than the Commonwealth, in a way that disadvantages them or imposes liabilities for actions taken prior to the registration of the TCO.
Key Provisions
The main sections of the Tariff Concession Instrument No. 0840197 (referred to as TCO No. 0840197) under the Customs Act 1901 (section 269F) involve the application and assessment process for a Tariff Concession Order (TCO). The CEO of Customs is responsible for deciding whether to grant a TCO based on whether the goods in question are substitutable by Australian-produced goods (section 269C). If the application meets the core criteria, the CEO must issue a written TCO declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (section 269P(3)). This instrument specifically pertains to certain bifold door drop bolts and declares that these goods are subject to item 50 of Schedule 4 to the Tariff, resulting in a duty rate of free instead of the general rate of 5%.
The obligations under the Act for parties such as Centor Australia Pty Ltd, who applied for the TCO, include submitting a valid application to the CEO, ensuring the application details the goods and the reasons why a concession should be granted. The CEO has the responsibility to assess the application against the core criteria (section 269C), which requires the CEO to determine that no substitutable goods are being produced in Australia. Additionally, the CEO is obligated to publish a notice in the Gazette inviting submissions from any interested parties and to consider any submissions received (subsection 269K(1)). In this case, no submissions were received, allowing the CEO to proceed with the order.
Failure to comply with the provisions of the Customs Act 1901 and the subsequent TCO can lead to legal consequences. Although specific offences and penalties are not detailed in the explanatory statement, breaches of customs laws generally can result in both civil and criminal penalties. Civil penalties might include financial penalties or fines, while criminal penalties could include imprisonment or fines depending on the severity and intent of the breach. The maximum penalties would be determined by the specific provisions of the Customs Act 1901 and any related regulations. The TCO itself does not impose liabilities on any person, but it does affect the rights of importers, who can apply for duty refunds on goods imported since the TCO came into effect (paragraph 126(1)(r) of the Regulations).