EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0905289
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.
Ajax Engineered Fasteners applied for a TCO in respect of certain wire fastener on 17 February 2009.
Instrument
TCO No 0905289 was made on 15 May 2009. It declares that those certain wire fastener 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. 0905289 is taken to have come into force on 17 February 2009.
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 was enacted to provide a regulatory framework for customs duties, border control, and trade facilitation in Australia. It establishes the procedures for the assessment and collection of customs duties and the mechanisms for enforcing compliance with customs laws. The Act was introduced to address the need for a cohesive legislative framework to manage the import and export of goods, ensuring that trade regulations are enforced effectively while facilitating legitimate trade activities. The Tariff Concession Instrument No. 0905289, introduced by the Chief Executive Officer of Customs in accordance with section 269F of the Act, aims to provide tariff concessions for certain goods by reducing or eliminating customs duties. The policy objective is to encourage the import of specific goods that are not produced in Australia, thereby benefiting the market and consumers by potentially lowering prices and increasing availability. The instrument was enacted by the relevant legislature to streamline the process for applying for and granting tariff concessions, ensuring that the scheme operates within the legislative framework established by the Customs Act 1901.
Scope and Application
The Customs Act 1901 applies to the process of making Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). The Act allows for lower rates of customs duty to apply to goods that are the subject of a TCO, providing relief to businesses and individuals who import specific goods not produced in Australia. A TCO can be applied for by any person, and the CEO must ensure the application meets the core criteria as outlined in the Act, primarily focusing on the absence of substitutable goods produced in Australia. The instrument applies to the specified goods, namely certain wire fasteners, and comes into force on the day the application is lodged. The Act's reach is national, with the CEO's decisions affecting the rights of importers and potentially providing them with a refund of duty on goods imported since the TCO's effective date. The Act does not disadvantage any person or impose liabilities in respect of actions taken before the TCO's registration date.
Key Provisions
The key provisions of this legislation, specifically the Tariff Concession Instrument No. 0905289, are found under Part XVA of the Customs Act 1901. Section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in relation to certain goods (s. 269F). If the CEO is satisfied that the application is not in relation to goods specified in section 269SJ, which lists those goods that cannot be subject to a TCO, they must determine if the application meets the core criteria (s. 269C). If the CEO is satisfied that the application meets these criteria, they must then make a written order (a TCO) (s. 269P(3)). This TCO will declare that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (s. 269P(3)). For example, in this case, certain wire fasteners are declared as being subject to item 50 of Schedule 4, with a duty rate of free instead of the general rate of 5%.
The obligations and requirements imposed by the Act on parties and entities are primarily on the CEO and the applicant. The CEO must ensure that the application is not for goods specified in section 269SJ and that it meets the core criteria set out in section 269C. If the CEO is satisfied that these conditions are met, they must then make the TCO as required by section 269P(3). The applicant, in this case Ajax Engineered Fasteners, must provide sufficient information and evidence to satisfy the CEO that the application meets the criteria for a TCO. Furthermore, the CEO must publish a notice in the Gazette inviting any interested parties to lodge a submission if they believe there are reasons why the TCO should not be made (s. 269K(1)). In this instance, no submissions were received in response to the invitation.
There are no specific offences, penalties, or consequences for breach outlined in this legislation. However, the Act does provide that the rights of persons other than the Commonwealth are not affected by the TCO in a way that disadvantages them or imposes liabilities for actions taken before the TCO was registered (s. 269S(1)). In this case, the TCO does not impose any liabilities on any person and will beneficially affect the rights of importers by allowing them to apply for a refund of duty on goods imported since the TCO came into force (Reg. 126(1)(r)). This ensures that the TCO operates within the legal framework without unjustly affecting third parties.