EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0844180
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.
Beaver Brands applied for a TCO in respect of certain pliers on 17 December 2008.
Instrument
TCO No 0844180 was made on 27 March 2009. It declares that those certain pliers 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. 0844180 is taken to have come into force on 17 December 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. 0844180 was enacted in 2009 under the Customs Act 1901 to provide a solution to the problem of ensuring that certain goods, in this case specific pliers, which are not produced in Australia and have no substitutable goods available domestically, can benefit from reduced customs duties. The instrument was introduced to address the need for tariff concessions for imported goods that are not manufactured locally, thus supporting trade and potentially reducing costs for businesses that import these goods. The enactment was carried out by the Chief Executive Officer of Customs, who assessed and approved the application from Beaver Brands following the core criteria set out in the Customs Act. The policy objective of this instrument is to facilitate the import of goods that cannot be produced locally, thereby supporting economic activity by lowering the cost of such imports.
Scope and Application
The Customs Act 1901 establishes a framework for Tariff Concession Orders (TCOs) under which the Chief Executive Officer of Customs can reduce customs duties on certain imported goods. This legislation applies to individuals or entities seeking tariff concessions for goods imported into Australia, provided the goods are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The Act requires that no substitutable goods, meaning goods produced in Australia that can serve the same purpose, are being produced in the ordinary course of business in Australia. If the CEO determines that an application meets these criteria, they must issue a TCO, as occurred with Beaver Brands for certain pliers, making the customs duty rate free instead of the general 5%. The TCO takes effect from the date the application was lodged, thus potentially benefiting importers who can apply for duty refunds on goods imported since that date. The Act does not disadvantage or impose liabilities on any person for actions taken before the TCO's effective date.
Key Provisions
The main operative sections of the Customs Act 1901, as applied to Tariff Concession Instrument No. 0844180, include section 269C (which sets the core criteria for the consideration of a Tariff Concession Order (TCO) application), section 269P (which requires the Chief Executive Officer (CEO) of Customs to make a written TCO if the core criteria are met), and section 269S (which establishes the commencement date for the TCO). In plain terms, these sections mandate that if an application for a TCO is valid, and no substitutable goods are produced in Australia, the CEO must issue a TCO, effective from the date of the application.
Under the Act, the CEO has specific obligations when handling TCO applications. Once an application is deemed valid, the CEO must publish a notice in the Gazette inviting submissions from interested parties, as outlined in section 269K. If no objections are received, the CEO must then determine whether to proceed with the TCO based on the core criteria specified in section 269C. Should the CEO decide that the application meets these criteria, a written TCO must be issued as per section 269P. The TCO will only apply to goods not already in Australia at the time of its registration, thereby protecting the rights of any parties who have already imported the goods, as per section 269S(1).
Failure to comply with the requirements of the Customs Act 1901 or the terms of a TCO could result in various consequences. While the Act does not specify particular offences related to TCOs, any breaches of the Act or misuse of the concession could potentially lead to civil or criminal penalties. For instance, knowingly importing goods that falsely claim tariff concessions could result in fines or imprisonment under the Act, depending on the severity of the offence. The specific penalties would be determined based on the general provisions of the Customs Act and any applicable regulations.
The Tariff Concession Instrument No. 0844180, effective from 17 December 2008, is a specific application of these sections. It declares that certain pliers are subject to a free rate of customs duty, instead of the general rate of 5%. This concession applies to these specific goods, as the CEO was satisfied that no substitutable goods were produced in Australia at the time of the application. The instrument does not impose any new liabilities and does not affect the rights of any persons other than the Commonwealth. Importers of these goods may also be eligible for refunds of duty paid on goods imported since the TCO's effective date, as per the relevant regulations.