EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0905291
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 0905291 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. 0905291 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, enacted by the Australian Parliament, establishes a framework for the imposition of customs duties and the provision of tariff concessions. The Act was introduced to facilitate the regulation of imported goods and ensure fair trade practices while protecting domestic industries. Tariff Concession Orders (TCOs) under Part XVA of the Act allow the Chief Executive Officer of Customs to provide duty relief on specific goods, provided certain conditions are met. TCO No. 0905291, issued on 15 May 2009, is an example of this mechanism in action, providing a tariff concession for certain wire fasteners applied for by Ajax Engineered Fasteners. The policy objective of this legislation is to support Australian industries by reducing the cost of imported goods that have no local substitutes, thereby fostering competition and potentially lowering consumer prices.
Scope and Application
The Customs Act 1901, as amended, applies to individuals and entities seeking tariff concession orders (TCO) for imported goods, specifically those that are not produced in Australia and for which no substitutable goods exist in the ordinary course of business. This legislation allows the Chief Executive Officer of Customs to grant a TCO that results in a lower rate of customs duty for specified goods. The Act applies across the Commonwealth of Australia and its territories, providing a mechanism for the review and potential granting of tariff concessions for certain imported goods. Notably, the Act excludes from TCO consideration any goods specified in section 269SJ, which includes items such as controlled goods or those that may otherwise be subject to specific regulatory restrictions. The scope of the Act can be further refined through subordinate instruments, which may specify additional criteria or exceptions to the general provisions outlined in the primary legislation.
Key Provisions
The Tariff Concession Instrument No. 0905291, made under the Customs Act 1901, establishes a tariff concession order (TCO) for certain wire fasteners, specifying a zero percent duty rate for these goods as opposed to the general 5 percent rate (sections 269C, 269P(3)). The instrument was issued on 15 May 2009, effective from 17 February 2009, when the application was lodged by Ajax Engineered Fasteners (subsection 269S(1)). This TCO applies to goods identified in item 50 of Schedule 4 to the Customs Tariff Act 1995, and it comes into force on the date the application was made (subsection 269S(1)).
Obligations under this TCO primarily concern the Chief Executive Officer of Customs (CEO), who must determine if an application for a TCO meets the core criteria, which require that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). The CEO must also ensure that the application does not pertain to goods specified in section 269SJ of the Act, which are ineligible for a TCO (section 269F). Once the CEO is satisfied that the application meets the core criteria, they must make a written TCO order (subsection 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting any person who believes the TCO should not be made to lodge a submission, though in this case, no submissions were received (subsection 269K(1)).
The Act imposes specific obligations on the CEO to rigorously assess TCO applications and ensure that they comply with the statutory requirements. The CEO must verify that the application pertains to goods not specified in section 269SJ and that no substitutable goods were produced in Australia in the ordinary course of business on the application date. If these criteria are met, the CEO must issue a written TCO order, as occurred in this instance (subsection 269P(3)). Furthermore, the CEO is required to publish a notice in the Gazette soliciting submissions from interested parties, although no submissions were received in this case (subsection 269K(1)).
Any breach of the requirements set out in the Customs Act 1901 could potentially lead to legal consequences, though the explanatory statement does not specify particular offences or penalties related to this TCO. However, general provisions within the Customs Act may include administrative penalties for non-compliance, such as fines or imprisonment, depending on the severity of the breach. The explanatory statement does clarify that the TCO does not affect the rights of any person as at the date of registration or impose any liabilities on any person (subsection 269S(1)). Instead, it allows importers to apply for a refund of duty on goods imported since the TCO's effective date (paragraph 126(1)(r) of the Regulations).