EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0910938
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.
Profast Industrial Fastenings Pty Ltd applied for a TCO in respect of certain nut inserts on 1 April 2009.
Instrument
TCO No 0910938 was made on 19 June 2009. It declares that those certain nut inserts 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. 0910938 is taken to have come into force on 1 April 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 Tariff Concession Instrument No. 0910938, enacted in 2009 under the Customs Act 1901, aims to facilitate tariff concessions for specific goods by providing lower rates of customs duty. This legislative instrument was introduced to address the need for streamlined processes in applying for and granting tariff concessions for goods, ensuring that businesses can benefit from reduced customs duties where appropriate. The instrument was developed by the Chief Executive Officer of Customs, acting under the authority conferred by section 269F of the Customs Act 1901. The primary policy objective is to support the efficient operation of the tariff concession scheme by providing clear criteria and a transparent process for applications, ultimately benefiting importers by reducing their duty liabilities on certain goods.
Scope and Application
The Customs Act 1901, under Part XVA, allows for the creation of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs. This legislative instrument applies to any person or entity that wishes to seek a tariff concession on goods that are not currently produced in Australia and for which no substitutable goods are produced in the ordinary course of business. The Act applies at a national level across Australia, with the concessions extending to all states and territories. The legislation does not impose any exclusions or exemptions except for those specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The application of the Act can be further defined or extended through subordinate instruments, which may specify additional criteria or processes for the application and review of TCOs. The TCO in question, made on 19 June 2009, applies to certain nut inserts and reduces the duty from 5% to free, effective from 1 April 2009, the date the application was lodged. The TCO does not affect any existing rights or impose any liabilities on individuals or entities other than the Commonwealth.
Key Provisions
The Tariff Concession Order (TCO) No. 0910938 under the Customs Act 1901 (the Act) primarily concerns the application of a reduced customs duty rate to certain nut inserts, as outlined in section 269P(3). This order, made on 19 June 2009, specifies that these nut inserts are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995 (the Tariff), with the general duty rate of 5% reduced to free. This order came into effect on 1 April 2009, the date the application was lodged (section 269S(1)).
Entities or individuals seeking a TCO must meet the core criteria set out in section 269C of the Act, which requires that no substitutable goods were produced in Australia at the time of application. The definitions of terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively. In this instance, the Chief Executive Officer of Customs (the CEO) was satisfied that no substitutable goods were produced in Australia, allowing the TCO to be made.
Under the Act, the CEO has specific obligations when processing a TCO application. These include publishing a notice in the Gazette as soon as practicable after accepting the application as valid, inviting any interested parties to submit objections (subsection 269K(1)). In the case of TCO No. 0910938, no submissions were received, indicating that no objections were raised against the concession. Additionally, the TCO does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on any person (subsection 269S(1)).
In terms of consequences for breach, the Act does not explicitly detail specific offences or penalties for failing to comply with the TCO provisions. However, general compliance with the Customs Act 1901 is enforced through various provisions that might include administrative penalties, fines, or other legal actions for non-compliance with customs regulations. Importers can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations).