EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0919375
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.
Heldon Products Pty Ltd applied for a TCO in respect of certain copper distributes on 09 June 2009.
Instrument
TCO No 0919375 was made on 04 September 2009. It declares that those certain copper distributes 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. 0919375 is taken to have come into force on 09 June 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 Parliament of Australia, provides a framework for managing customs duties and tariffs. This legislation was introduced to establish a systematic approach to the regulation of imported goods and the imposition of customs duties. Part XVA of the Act introduces a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). These orders allow for a lower rate of customs duty on specified goods. The problem this legislation addresses is the need for a streamlined process to grant tariff concessions to importers, ensuring that goods which are not produced domestically are subject to lower duties, thus promoting trade and economic efficiency. The policy objective outlined in the Act is to facilitate the import of goods that are not produced domestically by applying reduced customs duties, thereby supporting competitive markets and consumer choice.
The explanatory statement for Tariff Concession Instrument No. 0919375, which was made under the Customs Act 1901, details the process and decision made by the CEO regarding an application by Heldon Products Pty Ltd for tariff concessions on certain copper distributes. The CEO determined that these goods qualified for a tariff concession because no substitutable goods were produced in Australia. As a result, the instrument declares that the specified copper distributes are subject to a zero rate of duty, down from the general rate of 5%. This decision was made following a publication in the Gazette inviting public submissions, none of which were received. The TCO came into effect on the date the application was lodged, 9 June 2009, and it does not affect any pre-existing rights or impose new liabilities on individuals or entities.
Scope and Application
The Customs Act 1901 applies to entities and individuals who import goods into Australia, particularly those involved in the process of applying for Tariff Concession Orders (TCOs). These TCOs are subject to the approval of the Chief Executive Officer of Customs, who must ensure that the goods in question do not have substitutable goods produced domestically as outlined in section 269SJ of the Act. The legislation specifically targets goods that are not produced in Australia and for which no suitable substitute is available locally. This concession applies on a national level, across all states and territories in Australia. The Act does not impose liabilities on individuals or entities other than the Commonwealth, and the application of a TCO does not disadvantage any person or impose new obligations on them regarding actions taken prior to the TCO's registration. Additionally, the Act's application can be extended or modified through subordinate instruments, which may further define the specifics of tariff concessions and the criteria for their approval.
Key Provisions
The main operative sections of the Customs Act 1901 that govern Tariff Concession Orders (TCOs) include sections 269F, 269C, 269B, 269D, 269E, 269P, and 269K. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO. If the CEO determines that the application meets the core criteria, which include the absence of substitutable goods produced in Australia (as defined by sections 269C and 269B), the CEO must make a written order that declares the goods subject to the TCO (section 269P). Section 269K requires the CEO to publish a notice in the Gazette inviting any person to submit reasons why the TCO should not be made.
Under the Customs Act 1901, the CEO has specific obligations and requirements when handling a TCO application. Firstly, the CEO must ensure that the application is not for goods specified in section 269SJ, which lists those goods that cannot be subject to a TCO. If the application is valid and no submissions are received opposing the TCO, the CEO is required to make a written order declaring the goods subject to the TCO if they meet the core criteria. Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting the application as valid, inviting any interested parties to lodge submissions (section 269K).
Failure to comply with the requirements of the Customs Act 1901 regarding TCOs can result in civil or criminal consequences. While the specific offences and penalties are not detailed in the explanatory statement, general provisions of the Act may apply, including fines and imprisonment for breaches. The exact penalties would depend on the specific nature of the breach and any other applicable laws.
The Tariff Concession Order No. 0919375 was made on 4 September 2009 for certain copper distributes, declaring them to be subject to item 50 of Schedule 4 to the Customs Tariff Act 1995. This means that the general rate of duty on these goods, which is 5%, is reduced to free. The TCO came into force on 9 June 2009, the date on which the application was lodged, and it does not affect the rights of any person except to the extent of imposing a liability or disadvantaging them. Importers of these goods will benefit from the reduced duty rate and can apply for a refund of duty on goods imported since the TCO came into force under the Customs Act 1901.