EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0911234
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 applied for a TCO in respect of certain threaded nut inserts on 02 April 2009.
Instrument
TCO No 0911234 was made on 29 June 2009. It declares that those certain threaded 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. 0911234 is taken to have come into force on 02 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 Customs Act 1901 was enacted to regulate the importation and exportation of goods and manage customs duties and related matters in Australia. The Act provides a framework for the administration of customs and excise, including the imposition of duties and the facilitation of trade. In 2009, Tariff Concession Instrument No. 0911234 was introduced to address the need for tariff concessions for specific goods. This instrument, made under the authority of the Customs Act, allows for the application of reduced or zero customs duty on certain goods, provided that no substitutable goods are produced in Australia. This policy aims to support Australian industries by ensuring that imported goods are subject to fair competition and do not displace local production. The instrument was created following an application by Profast Industrial Fastenings for a tariff concession on certain threaded nut inserts, which was approved by the Chief Executive Officer of Customs, as no substitutable goods were produced in Australia. The instrument came into effect on the date of the application, 02 April 2009, and no submissions were received in opposition to the concession.
Scope and Application
The Tariff Concession Instrument No. 0911234, issued under the Customs Act 1901, applies to entities or individuals seeking tariff concessions for specific goods imported into Australia. This legislation primarily affects importers of certain threaded nut inserts, allowing them to benefit from a lower rate of customs duty under the scheme outlined in Part XVA of the Customs Act 1901. The instrument specifically exempts these goods from the usual 5% customs duty rate, reducing it to free, provided the CEO of Customs is satisfied that no substitutable goods are produced in Australia. The instrument was made on 29 June 2009, effective from 2 April 2009, the date on which the application was lodged. Importantly, the TCO does not retroactively disadvantage any persons other than the Commonwealth nor impose liabilities for actions taken prior to its registration. The scope of the Act extends to the national level and can be further detailed or modified through subordinate instruments.
Key Provisions
The Tariff Concession Instrument No. 0911234 under the Customs Act 1901 provides a framework for the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCOs) that result in lower rates of customs duty on specific goods. According to Section 269F of the Act, a person can apply to the CEO for a TCO regarding particular goods. If the CEO determines that the application pertains to goods not specified in Section 269SJ, which lists goods ineligible for a TCO, the CEO must then decide whether the application meets the core criteria outlined in Section 269C. This section stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business.
The obligations imposed by this Act on parties or entities it governs include the requirement that the CEO must, if satisfied that a TCO application meets the core criteria, make a written order declaring that the goods subject to the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. This process is outlined in Subsection 269P(3) of the Act. Additionally, Subsection 269K(1) mandates that the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO. In this case, the CEO did not receive any submissions in response to the invitation.
In terms of offences, penalties, or consequences for breach, the Act does not explicitly state any civil or criminal penalties for failing to comply with the requirements of a TCO. However, any breach of the Customs Act 1901 or associated regulations could result in penalties under the broader provisions of the Act. For instance, under Section 234 of the Customs Act 1901, a person found guilty of an offence may be liable to a penalty of up to 10,000 penalty units or imprisonment for up to five years, or both, for a single offence, and up to 20,000 penalty units or imprisonment for up to ten years, or both, for a continuing offence. This underscores the importance of adhering to the regulations set forth by the Act to avoid any potential legal repercussions.