EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0916936
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 cast iron coupling nuts on 19 May 2009.
Instrument
TCO No 0916936 was made on 14 August 2009. It declares that those certain cast iron coupling nuts 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. 0916936 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. 0916936 was enacted in 2009 under the Customs Act 1901 to address the need for tariff concessions on specific goods. This instrument was introduced to facilitate the reduction of customs duties on certain goods, thereby supporting economic activities by making imported goods more affordable. The instrument was created to provide relief to businesses that import goods which are not produced domestically, thus encouraging trade and economic growth. The Tariff Concession Order (TCO) was issued by the Chief Executive Officer of Customs in response to an application by Hilti Australia for tariff concessions on certain cast iron coupling nuts. This order was designed to ensure that the application of the Customs Act aligns with the economic policy objectives of promoting trade and reducing barriers to the importation of non-domestically produced goods.
The instrument was developed and enacted by the Australian Parliament and aims to streamline the process of applying for and granting tariff concessions, ensuring that businesses can more easily access foreign goods without the burden of high customs duties. The TCO does not retroactively affect any legal rights or impose new liabilities on individuals or entities, safeguarding existing rights and obligations. The Tariff Concession Instrument No. 0916936 is effective from the date of the application, in this case, 19 May 2009, and allows for the refund of duties paid on the specified goods since that date.
Scope and Application
The Tariff Concession Instrument No. 0916936 under the Customs Act 1901 applies specifically to the goods that are the subject of a Tariff Concession Order (TCO), in this case, certain cast iron coupling nuts. The Act allows for the Chief Executive Officer of Customs (CEO) to make a TCO when an application is lodged and the CEO is satisfied that no substitutable goods were produced in Australia in the ordinary course of business at the time of application. This concession applies to the goods specified in the TCO, reducing their customs duty rate to zero, as opposed to the general rate of 5%. The Act extends its reach across the Commonwealth of Australia and applies to any person or entity seeking to import the specified goods, provided they meet the criteria for a TCO. The application process includes a mandatory publication in the Gazette, inviting submissions from interested parties, although in this instance, no submissions were received. The TCO does not retroactively disadvantage any person or impose liabilities on anyone for actions taken before the TCO’s effective date. Instead, it benefits importers by potentially allowing them to apply for a refund of duty paid on the goods since the TCO’s commencement date.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0916936 are found in Part XVA of the Customs Act 1901, particularly sections 269C, 269F, 269P, and 269S. Section 269F allows for the application for a Tariff Concession Order (TCO) by a person to the Chief Executive Officer (CEO) of Customs. If the CEO determines that the application meets the core criteria, as outlined in section 269C, and there are no substitutable goods produced in Australia in the ordinary course of business, a TCO is to be issued under section 269P. This order specifies a lower rate of customs duty for the goods in question. For the specific case of certain cast iron coupling nuts, section 50 of Schedule 4 to the Customs Tariff Act 1995 applies, which reduces the duty rate from 5% to free.
The obligations imposed by this legislation on the parties primarily involve the application process and the conditions under which the TCO can be granted. Under section 269K, the CEO must publish a notice in the Gazette inviting submissions from any interested parties regarding the proposed TCO. This ensures that the decision-making process is transparent and allows for any objections to be raised. The CEO is also required to ensure that the application meets the core criteria, particularly that no substitutable goods are produced in Australia in the ordinary course of business, as stipulated in section 269C. Furthermore, the CEO must issue a written TCO if the criteria are satisfied, as outlined in section 269P.
In terms of potential breaches and penalties, the Customs Act 1901 does not specify explicit criminal or civil penalties for failing to comply with the requirements of a TCO or for making a false application. However, any breach of the conditions set by a TCO could potentially lead to disputes over duty refunds or liabilities. The Act ensures that the rights of persons other than the Commonwealth are not adversely affected by the issuance of a TCO, as per section 269S, and that no new liabilities are imposed. The TCO itself does not impose any liabilities on any person, safeguarding against retrospective financial burdens.
Finally, it is important to note that the TCO does not affect the rights of any person as at the date of registration, ensuring that the rights of importers are beneficially affected. Importers can apply for a refund of duty on goods imported since the TCO is taken to have come into force, as specified under paragraph 126(1)(r) of the Regulations. This provision provides a clear mechanism for ensuring that importers are not disadvantaged by the retrospective application of the TCO.