EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0916757
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 applied for a TCO in respect of certain steel and or plastic inner tubes on 19 May 2009.
Instrument
TCO No 0916757 was made on 07 August 2009. It declares that those certain steel and or plastic inner tubes 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. 0916757 is taken to have come into force on 19 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 Tariff Concession Instrument No. 0916757 was enacted in 2009 under the Customs Act 1901, aiming to address the issue of tariff concessions for specific imported goods. This instrument was introduced to facilitate the application of reduced customs duty rates on certain goods, provided they meet the core criteria stipulated in the Act. Specifically, the Customs Act 1901 allows for Tariff Concession Orders (TCOs) that can be applied to goods, resulting in lower duty rates when no substitutable goods are produced in Australia. The Tariff Concession Instrument No. 0916757, made by the Chief Executive Officer of Customs, declared that certain steel and plastic inner tubes would benefit from a zero percent duty rate, as no equivalent products were manufactured locally. This initiative was designed to enhance the competitiveness of imported goods in the Australian market, thereby benefiting importers and potentially reducing costs for consumers.
Scope and Application
The Customs Act 1901, as augmented by Tariff Concession Orders (TCOs) such as Instrument No. 0916757, applies to individuals and entities seeking tariff concessions on imported goods. Specifically, it addresses importers who apply for lower rates of customs duty on particular goods, provided these goods are not restricted under section 269SJ of the Act and meet the core criteria outlined in section 269C, including the absence of substitutable goods produced in Australia in the ordinary course of business. The legislation extends across the Commonwealth of Australia, impacting the importation process for the goods specified in the TCO, in this case, certain steel and plastic inner tubes. These goods now enjoy a duty-free status under item 50 of Schedule 4 to the Customs Tariff Act 1995. The Act facilitates this process by allowing the Chief Executive Officer of Customs to make written orders declaring the tariff concessions, thereby streamlining import duties for specific goods and benefiting importers who can apply for duty refunds on eligible imports. The application of this legislation is precise, with no submissions received during the consultation period for the specified TCO, indicating a streamlined process with minimal opposition.
Key Provisions
The Tariff Concession Order (TCO) No. 0916757, established under the Customs Act 1901, specifically addresses the application of customs duty rates to certain steel and plastic inner tubes (sections 269C, 269F, 269P(3)). The core criteria for a TCO, as outlined in section 269C, require that no substitutable goods are produced in Australia on the day the application is lodged. In this case, the Chief Executive Officer of Customs (CEO) determined that no such substitutable goods were produced in Australia, thereby allowing the TCO to be issued. Under section 269P(3), the CEO issued a written order declaring that the specified goods are subject to the TCO, effectively reducing the general rate of duty from 5% to free.
The obligations imposed by the Customs Act 1901 on the parties involved are primarily procedural. Section 269F mandates that an application for a TCO must be made to the CEO. Once accepted, the CEO must evaluate whether the application meets the core criteria, which includes ensuring that the goods are not specified in section 269SJ, which lists goods ineligible for TCOs. If the CEO is satisfied with the application, they must publish a notice in the Gazette inviting submissions from interested parties (subsection 269K(1)). In this instance, no submissions were received, leading to the issuance of the TCO. Additionally, under section 269S(1), the TCO is deemed to have come into force on the date the application was lodged.
The Act does not specify explicit offences or penalties for non-compliance with TCOs; however, general provisions of the Customs Act 1901 apply. For instance, any breach of customs regulations, including unauthorised importation or fraudulent claims, can result in significant penalties. The maximum penalties for serious breaches of customs laws can include substantial fines and imprisonment, depending on the severity of the offence. For example, under section 236 of the Customs Act 1901, an individual found guilty of an offence involving fraudulent statements or actions could face fines of up to $22,000 or imprisonment for up to two years, or both, for a first offence. For subsequent offences, the penalties can increase significantly.