EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0916934
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 threaded tubes on 19 May 2009.
Instrument
TCO No 0916934 was made on 14 August 2009. It declares that those certain threaded 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. 0916934 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for the administration of customs duties and the regulation of goods entering and leaving the country. One of its key provisions is Part XVA, which allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) to reduce customs duty rates on specific goods, subject to certain criteria. This legislative tool aims to address gaps in the availability and affordability of goods within the Australian market by making them more competitively priced through reduced tariffs. TCO No. 0916934, enacted in 2009, is an example of this mechanism in action, providing tariff concessions on certain threaded tubes to Hilti Australia, thereby reducing the customs duty on these goods from 5% to free. The process involves an application to the CEO, a review to ensure the goods meet the core criteria, and public consultation, although in this instance, no objections were received. The policy objective is to facilitate access to goods that are not produced domestically, thus benefiting consumers and potentially enhancing the competitiveness of Australian businesses.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). These orders apply to goods for which an application has been submitted and approved by the CEO, provided the goods are not specified in section 269SJ of the Act as ineligible for a TCO. The application process requires the applicant to demonstrate that the goods in question are not substitutable by products manufactured in Australia, as defined by section 269C. This application process is crucial for determining whether the goods meet the core criteria set out in the Act. Once approved, a TCO can significantly reduce or eliminate customs duties on specified goods, as illustrated by Tariff Concession Instrument No. 0916934, which grants duty-free status to certain threaded tubes. The application and approval process includes public consultation as mandated by the Act, although in this instance, no objections were raised. The TCO's effective date aligns with the application date, ensuring that any rights or liabilities are not retroactively affected.
Key Provisions
The Tariff Concession Instrument No. 0916934, made under section 269F of the Customs Act 1901, provides a lower rate of customs duty on certain threaded tubes. This instrument was issued on 14 August 2009, following an application by Hilti Australia on 19 May 2009. The primary operative sections, namely sections 269C, 269B, 269D, 269E, and 269P, require that the Chief Executive Officer (CEO) of Customs must ensure that no substitutable goods are produced in Australia before deciding to make a Tariff Concession Order (TCO). If the CEO is satisfied that no such goods exist, the CEO must then declare that the goods in question are subject to a reduced duty rate as specified in the Customs Tariff Act 1995.
The obligations imposed by this Act on the parties involved are significant. For the CEO of Customs, the obligation is to assess whether the application for a TCO meets the core criteria, which include verifying that no substitutable goods are produced in Australia. The CEO must also ensure that the application is not for goods specified in section 269SJ of the Act, which are ineligible for a TCO. Furthermore, the CEO must publish a notice in the Gazette, inviting any person who believes the TCO should not be made to lodge a submission. In this case, the CEO did not receive any submissions, indicating no objections to the TCO.
In terms of breaches and consequences, the Customs Act 1901 does not explicitly detail offences or penalties related to the application or implementation of a TCO. However, any misuse or fraudulent claims related to the concession would likely be subject to general penalties under the Act. The Act mandates that the TCO does not affect the rights of any person as at the date of registration, and thus, it does not impose any liabilities on any person. Importers, however, are afforded the benefit of applying for a refund of duty on goods imported since the TCO came into force. This provision underscores the importance of compliance with the terms set out in the TCO to avoid potential repercussions.