EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0920463
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 Pty Ltd applied for a TCO in respect of certain adhesive concrete and or masonry epoxy on 17 June 2009.
Instrument
TCO No 0920463 was made on 14 September 2009. It declares that those certain adhesive concrete and or masonry epoxy 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. 0920463 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 was enacted by the Australian Parliament to regulate customs duties and provide a framework for the administration of customs and excise. One of the provisions of the Act, specifically Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which allow for a lower rate of customs duty on certain goods. This mechanism was introduced to address the need for flexibility in customs duty rates to support industry and economic development by providing tariff relief on goods for which there are no suitable Australian-made alternatives. In accordance with the legislative process, TCO No. 0920463 was issued on 14 September 2009, following an application by Power Fasteners Pty Ltd for tariff concessions on specific adhesive concrete and masonry epoxy products, and it came into effect on 17 June 2009. The policy objective of this specific TCO was to provide tariff relief by reducing the duty rate from the general 5% to free, thereby benefiting importers of these goods.
Scope and Application
The Customs Act 1901, specifically through Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to any person who can apply for a TCO in respect of goods, provided those goods are not specified in section 269SJ of the Act, which lists items ineligible for a TCO. The primary scope of the Act includes the determination of whether a TCO application meets the core criteria, which require that no substitutable goods were produced in Australia on the day the application was lodged. The geographic reach of this Act is national, with its provisions extending across Australia. Subordinate instruments may further define and extend the application of TCOs, but the primary legislation itself sets out the foundational criteria and processes. Importantly, a TCO does not retroactively affect the rights of any person, ensuring that only future transactions are subject to the tariff concessions it provides.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0920463 under the Customs Act 1901 (section 269P(3)) require the Chief Executive Officer (CEO) of Customs to make a written order, or Tariff Concession Order (TCO), if satisfied that an application for tariff concession meets the core criteria. This means that the CEO must determine if no substitutable goods were produced in Australia at the time the application was lodged (section 269C). If the CEO decides the application meets these criteria, a TCO is issued, which then applies a specified tariff to the goods in question (section 269P(3)). This particular TCO, No. 0920463, applies to certain adhesive concrete and masonry epoxy, granting them a duty-free rate as opposed to the general rate of 5% (section 269S(1)). The TCO came into force on the day the application was lodged, which was 17 June 2009.
The obligations imposed by this Act on the parties or entities it governs include the requirement for the CEO to publish a notice in the Gazette inviting submissions from any person who may have reasons to oppose the making of a TCO (subsection 269K(1)). In this case, no submissions were received, so the TCO was issued without any opposition. Additionally, the CEO must ensure that the TCO does not disadvantage any person or impose liabilities on them in respect of actions taken before the TCO came into force (subsection 269S(1)). This TCO ensures that the rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the effective date of the TCO.
Breach of the provisions of this Act can result in various civil or criminal consequences. For instance, if an entity fails to comply with the notice requirements under subsection 269K(1), it may face legal challenges regarding the validity of the TCO. The maximum penalties for non-compliance with customs regulations can include fines and imprisonment, although specific penalties are not detailed in this particular explanatory statement. Importers who do not comply with the refund application process under paragraph 126(1)(r) of the Regulations may also face financial penalties or other civil consequences. It is important for all parties to adhere to the obligations and requirements outlined in the Act to avoid these potential repercussions.