EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0916495
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.
Hilti Australia Pty Ltd applied for a TCO in respect of certain anchor rock self drilling on 14 May 2009.
Instrument
TCO No 0916495 was made on 31 July 2009. It declares that those certain anchor rock self drilling 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. 0916495 is taken to have come into force on 14 May 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 facilitate the regulation of goods entering and exiting Australia. The Tariff Concession Instrument No. 0916495, introduced in 2009, addresses the need for tariff concessions to foster trade and economic growth. This instrument was developed by the Chief Executive Officer of Customs, acting under the authority granted by the Act, to provide specific tariff concessions on certain goods. The primary objective of this instrument is to lower the customs duty on particular goods, in this case, certain anchor rock self drilling, to zero percent from the general rate of 5%, thereby benefiting the rights of importers and encouraging the importation of these goods.
The Tariff Concession Order No. 0916495 was made following an application by Hilti Australia Pty Ltd and was published in the Gazette to allow for public consultation, although no objections were received. This instrument is effective from the date the application was lodged, 14 May 2009, and it does not affect the rights of any person prior to its registration. The introduction of this concession aims to support trade practices by reducing the financial burden on importers, ultimately contributing to the economic benefits of the importation of these goods.
Scope and Application
The Customs Act 1901, through its Part XVA, governs the process of Tariff Concession Orders (TCOs) that apply a lower rate of customs duty to specified goods, subject to certain conditions. This Act applies to individuals or entities, such as Hilti Australia Pty Ltd, that seek to reduce the duty on specific goods by applying for a TCO. The application process requires that the goods in question are not specified in section 269SJ of the Act, which excludes certain goods from eligibility, and that the goods are not substitutable by any produced in Australia. The geographic and jurisdictional reach of this Act is Commonwealth-wide, meaning it applies across Australia. The Act’s scope extends through subordinate instruments, such as the Customs Tariff Act 1995, which lists the applicable duty rates. The Explanatory Statement for Instrument TCO No. 0916495 demonstrates the application of these provisions, illustrating how the Chief Executive Officer of Customs can declare that certain goods are subject to a free rate of duty if no substitutable goods are produced domestically. This instrument, effective from the date of the application, ensures that the rights of importers are protected and can benefit from duty refunds on imports made post-registration without imposing any new liabilities.
Key Provisions
The Customs Act 1901 (the Act) establishes a framework for the creation of Tariff Concession Orders (TCOs), which are granted by the Chief Executive Officer of Customs (the CEO) to lower the rate of customs duty on specified goods (sections 269F and 269P). An application for a TCO can be made by any person, provided that the goods in question are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. The CEO must assess whether the application meets the core criteria set out in section 269C of the Act, specifically, that no substitutable goods were produced in Australia at the time the application was lodged.
Entities subject to the Act must adhere to the requirements of the legislation when applying for a TCO. This includes ensuring that the goods in question are not prohibited under section 269SJ and that the application is made in accordance with the definitions provided in sections 269D and 269E of the Act. If the CEO determines that the application meets the core criteria, a written order will be made, declaring that the goods are subject to a prescribed tariff concession (subsection 269P(3)). For example, in TCO No. 0916495, certain anchor rock self drilling tools were declared to be subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with a duty rate of free, as opposed to the general rate of 5% (section 269P(3)).
The CEO must also publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who believes the TCO should not be made to submit their reasons to the CEO (subsection 269K(1)). No submissions were received in response to the notice for TCO No. 0916495. A TCO is considered to have come into force on the date the application was lodged (subsection 269S(1)). Consequently, TCO No. 0916495 is deemed to have come into effect on 14 May 2009. The TCO does not adversely affect any rights of a person, other than the Commonwealth, as at the date of registration, nor does it impose any liabilities on any person for actions taken prior to the registration date (subsection 269S(1)).
Breaches of the Customs Act 1901 may result in various civil and criminal consequences. Offences under the Act can lead to substantial penalties, including fines and imprisonment, depending on the severity of the breach. The specific penalties for breaches are not detailed in the provided text but would be determined based on the particular offence and the provisions of the Customs Act 1901 and related regulations. Importers can apply for a refund of duty on goods imported since the TCO came into force, under paragraph 126(1)(r) of the Regulations.