EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0920460
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 styrene free on 17 June 2009.
Instrument
TCO No 0920460 was made on 14 September 2009. It declares that those certain adhesive concrete and or masonry styrene free 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. 0920460 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 Tariff Concession Instrument No. 0920460 was enacted under the Customs Act 1901 to address the need for tariff concessions on specific goods, enabling lower rates of customs duty for goods that meet certain criteria. This instrument was introduced by the Chief Executive Officer of Customs following an application from Power Fasteners on 17 June 2009. The policy objective is to provide a concessional rate of duty for certain adhesive concrete and masonry styrene free, effectively reducing the duty from 5% to free, provided that no substitutable goods are produced in Australia. The instrument was made on 14 September 2009, and it came into force on the date of the application, 17 June 2009, with no adverse effects on the rights of persons other than the Commonwealth. Importers of these goods will benefit from being able to apply for a refund of duty from the effective date of the concession.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), aimed at providing lower rates of customs duty on specific goods. This legislative instrument applies to any person or entity that wishes to apply for a TCO concerning goods not specified in section 269SJ of the Act, which excludes certain goods from this concession. The application process necessitates that the CEO ensures no substitutable goods are produced in Australia in the ordinary course of business, as defined in sections 269D and 269E of the Act. The scope of the Act is national, impacting importers who can benefit from the tariff concessions and potentially apply for duty refunds on goods imported since the effective date of the TCO. The TCO does not retroactively disadvantage any person or impose liabilities for actions taken before the TCO's registration date, thus safeguarding existing rights. The application and effect of TCOs may be further detailed through subordinate instruments, expanding on the initial provisions laid out in the Customs Act 1901.
Key Provisions
The key operative sections of the Customs Act 1901, as relevant to Tariff Concession Orders (TCOs), include section 269F, which allows an individual to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods (s 269F). Section 269C stipulates that a TCO application meets the core criteria if, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business (s 269C). Additionally, section 269P(3) mandates that if the CEO is satisfied that a TCO application meets the core criteria, they must issue a written order (a TCO) declaring that the goods specified in the application are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (s 269P(3)). The CEO must also ensure that the application does not concern goods specified in section 269SJ, which are ineligible for a TCO (s 269SJ).
The obligations and requirements imposed by the Act on the parties involved, particularly the CEO and applicants, are detailed and specific. The CEO is obligated to assess whether an application for a TCO meets the core criteria, which includes confirming that no substitutable goods were produced in Australia on the application date (s 269C). If the application is deemed valid, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not proceed (s 269K(1)). The CEO must also consider any submissions received and make a written order if the application meets the core criteria (s 269P(3)). The applicant, such as Power Fasteners in this instance, must submit an application that provides sufficient information to allow the CEO to determine whether the core criteria are met.
The legislation outlines specific offences, penalties, and consequences for breach. While the explanatory statement does not explicitly mention penalties for non-compliance with the Act, it is clear that failure to adhere to the requirements of a TCO, such as improperly claiming tariff concessions, could result in civil or criminal consequences under the broader Customs Act 1901. The exact penalties would depend on the nature and severity of the breach, but they could include fines, imprisonment, or both. The Act ensures that the rights of importers are protected and that any existing liabilities are not adversely affected by the introduction of a TCO, providing a clear legal framework for tariff concession applications and enforcement.