EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0920459
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.
Power Fasteners applied for a TCO in respect of certain adhesive concrete and or masonry polyester resin on 17 June 2009.
Instrument
TCO No 0920459 was made on 14 September 2009. It declares that those certain adhesive concrete and or masonry polyester resin 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. 0920459 is taken to have come into force on 17 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 the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs). The Act was introduced to address the need for flexibility in applying customs duties to specific goods, ensuring that Australia's trade policies can adapt to various economic and industrial circumstances. The Tariff Concession Instrument No. 0920459, made in 2009, exemplifies this flexibility by providing a concession on customs duties for certain adhesive concrete and or masonry polyester resins. This particular TCO was made in response to an application by Power Fasteners, and the instrument declares that these goods are subject to a free rate of duty as of the application date, 17 June 2009, because no substitutable goods were produced in Australia at the time. The policy objective of this TCO is to facilitate the importation of these goods without incurring the general rate of duty, thereby supporting industries reliant on these materials and potentially reducing costs for consumers.
Scope and Application
The Customs Act 1901 provides a framework for the administration of customs and excise duties in Australia, including provisions for Tariff Concession Orders (TCOs) under Part XVA. These orders are designed to provide relief from customs duty on specific goods, which are determined to not have substitutable products produced domestically. The process involves an application to the Chief Executive Officer of Customs, who must assess whether the application meets the core criteria outlined in the Act, such as the absence of substitutable goods produced in Australia. If the CEO determines that the criteria are met, a TCO is issued, granting the applicant a lower rate of customs duty on the specified goods. The scope of the Act applies to individuals and entities involved in the importation of goods, specifically those who may benefit from tariff concessions. The geographic reach of this legislation is national, as it applies across all states and territories in Australia. However, there are exclusions where certain goods specified in section 269SJ of the Act cannot be subject to a TCO. The application of the Act may also be extended or restricted through subordinate instruments, which can provide further detail or clarification on specific operational aspects. The commencement of a TCO is deemed to be effective from the date of the application, providing immediate benefit to importers who may qualify for duty refunds on imports made since the effective date of the concession.
Key Provisions
The Customs Act 1901, through its Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (section 269F). Section 269C stipulates that a TCO application will meet the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. This criterion is essential for determining eligibility for a tariff concession, which involves reducing the customs duty on specific goods. The term "substitutable goods" is defined under section 269B as those produced in Australia that can be used in the same way as the goods for which the TCO is being sought.
The Act imposes certain obligations on both the applicant and the CEO. The applicant must ensure that their TCO application is lodged correctly and meets the criteria set out in section 269C. The CEO, upon receiving a valid application, must determine whether it meets the core criteria and, if satisfied, issue a written order as a TCO (subsection 269P(3)). Additionally, the CEO is required to publish a notice in the Gazette as soon as practicable after accepting the application as valid, inviting any interested parties to submit objections (subsection 269K(1)).
Failing to comply with the requirements of the Customs Act 1901 regarding TCOs can lead to various consequences. Although specific offences and penalties are not outlined in the text, breaches of the Act generally result in civil or criminal penalties. These can include fines and, in severe cases, imprisonment. The exact penalties would depend on the nature and severity of the breach, as determined by relevant authorities. The Act ensures that the rights of importers are protected, and they can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations). However, the TCO does not impose any liabilities on any person, ensuring that the concessions do not disadvantage existing stakeholders.