EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0917660
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.
Powers Fasteners applied for a TCO in respect of certain wallboard fasteners on 26 May 2009.
Instrument
TCO No 0917660 was made on 14 August 2009. It declares that those certain wallboard fasteners 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. 0917660 is taken to have come into force on 26 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 trade and ensure efficient management of customs duties in Australia. The Act includes provisions for the creation of Tariff Concession Orders (TCOs), which are used to provide tariff relief on certain goods, thereby addressing the problem of excessive customs duties on imported goods that have no Australian-made equivalents. The instrument in question, Tariff Concession Instrument No. 0917660, was introduced by the Chief Executive Officer of Customs under section 269F of the Customs Act 1901. The policy objective of this particular TCO is to provide tariff relief on certain wallboard fasteners by setting the rate of duty at free, as no substitutable goods were produced in Australia at the time of the application. This measure is intended to benefit importers by potentially reducing their duty costs and ensuring a level playing field for imported goods.
Scope and Application
The Tariff Concession Instrument No. 0917660, made under the Customs Act 1901, pertains to the application process for Tariff Concession Orders (TCOs) concerning specific wallboard fasteners. The Act applies to any person who seeks a tariff concession for goods, provided those goods are not specified in section 269SJ of the Act as ineligible for such concessions. The instrument was made by the Chief Executive Officer of Customs after an application by Powers Fasteners on 26 May 2009. The instrument's geographic reach is national, as it applies across Australia in accordance with the Commonwealth's customs laws. The TCO, which became effective on the day of the application, grants free duty on certain wallboard fasteners, reducing the general rate of 5% to zero. The legislation ensures that the rights of the Commonwealth and third parties are not adversely affected by the concession, while importers stand to benefit by potentially applying for duty refunds on goods imported since the TCO's effective date.
Key Provisions
The primary operative sections of the Customs Act 1901 that are relevant to this Tariff Concession Order (TCO) are sections 269F, 269C, 269B, and 269P. Section 269F allows an application to be made to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the CEO is satisfied that the application meets the core criteria specified in section 269C, they must make a written order declaring that the goods in question are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995. This is contingent upon the CEO being satisfied that no substitutable goods were produced in Australia on the day the application was lodged, as outlined in section 269B. Section 269P(3) provides the mechanism for the CEO to make a TCO if satisfied that the application meets the core criteria.
The Act imposes several obligations and requirements on the parties involved. Firstly, the CEO must ensure that any application for a TCO is valid and does not pertain to goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The CEO must then determine if the application meets the core criteria as per section 269C. This includes verifying that no substitutable goods were produced in Australia on the day the application was lodged. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made. In this case, the CEO did not receive any submissions.
Regarding potential breaches and consequences, the Customs Act 1901 does not explicitly outline specific offences or penalties for failing to comply with the provisions of a TCO. However, general principles of administrative law apply, and any breach of the Act or regulations could lead to civil or criminal consequences. For instance, if a person knowingly imports goods without paying the applicable duty, they could face prosecution under section 132 of the Act, which carries a maximum penalty of 10,000 penalty units or imprisonment for five years, or both, depending on the severity of the offence. The TCO itself does not impose any liabilities on any person and does not affect the rights of a person other than the Commonwealth as at the date of registration.