EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0921309
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 vinyl ester glass adhesive on 23 June 2009.
Instrument
TCO No 0921309 was made on 11 September 2009. It declares that those certain vinyl ester glass adhesive 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. 0921309 is taken to have come into force on 23 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. 0921309, enacted in 2009, is an instrument under the Customs Act 1901 designed to provide tariff concessions for specific goods. The instrument was introduced to address the need for lowering customs duties on certain goods where no substitutable goods are produced in Australia, thereby supporting the import of these goods and potentially benefiting related industries. The instrument was enacted by the Chief Executive Officer of Customs, who has the authority to make such orders under section 269F of the Customs Act. The primary policy objective is to facilitate the importation of goods that are not domestically produced, thereby potentially lowering costs and increasing the availability of these goods in the Australian market. This instrument came into force on the day the application was lodged, 23 June 2009, and does not impose any liabilities on persons other than the Commonwealth or affect any pre-existing rights adversely.
Scope and Application
The Tariff Concession Instrument No. 0921309 applies to certain vinyl ester glass adhesive goods, as specified by Power Fasteners in their application lodged on 23 June 2009. This legislation falls under the purview of the Customs Act 1901 and operates within the framework of Tariff Concession Orders (TCOs), which allow for lower rates of customs duty on specified goods. The instrument, declared on 11 September 2009, applies the general rate of duty of 5% to these goods, which are covered by item 50 of Schedule 4 to the Customs Tariff Act 1995. The instrument is applicable to the Commonwealth of Australia, and it does not affect any rights or impose liabilities on any person other than the Commonwealth as of the date of registration. The TCO is effective from the date of application, 23 June 2009, and it benefits importers who can apply for duty refunds on goods imported since that date. The Act mandates that the Chief Executive Officer of Customs must ensure that no substitutable goods are produced in Australia for these items to qualify for the concession.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0921309 (section 269P(3)) declare that certain vinyl ester glass adhesives are subject to a tariff concession order (TCO). The CEO was satisfied that no substitutable goods were produced in Australia, and thus, a TCO was issued. This means that these specific goods, previously subject to a 5% duty, are now duty-free (section 269P(3)). This concession applies from the date the application was lodged, 23 June 2009 (subsection 269S(1)), not from the date the TCO was made on 11 September 2009. The TCO does not affect any existing rights or impose new liabilities on persons other than the Commonwealth (subsection 269S(2)). Importers, in particular, have the right to apply for a refund of duties paid on these goods since the effective date of the TCO (paragraph 126(1)(r) of the Regulations).
The Act imposes several obligations on parties involved in the TCO process. Firstly, an applicant, such as Power Fasteners, must submit an application to the CEO for a TCO in respect of specified goods (section 269F). The CEO must then determine whether the application meets the core criteria, specifically whether no substitutable goods are produced in Australia in the ordinary course of business (section 269C). If the criteria are met, the CEO must make a written TCO (section 269P(3)). Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). This notice ensures transparency and allows for any objections to be considered before the TCO is issued.
Failure to comply with the requirements of the Customs Act 1901 may result in various consequences. While specific offences and penalties for breaches related to TCOs are not detailed in the explanatory statement, general provisions within the Customs Act provide for criminal and civil penalties. For example, knowingly making a false statement or representation in an application can lead to criminal penalties, including fines and imprisonment (section 233). Similarly, contravening a TCO or any other provision of the Act may result in civil penalties, such as fines up to a specified maximum amount (section 283). These penalties underscore the importance of adhering to the Act's requirements.
The TCO does not disadvantage any person other than the Commonwealth and does not impose any new liabilities on anyone (subsection 269S(2)). However, it does provide a benefit to importers who can now apply for a refund of any duty paid on these goods since the effective date of the TCO (paragraph 126(1)(r) of the Regulations). This provision ensures that the tariff concession operates fairly, without imposing undue burdens on any party.