EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0931142
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.
Hilti Australia applied for a TCO in respect of certain rock anchor on 25 August 2009.
Instrument
TCO No 0931142 was made on 13 November 2009. It declares that those certain rock anchor 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. 0931142 is taken to have come into force on 25 August 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. 0931142, enacted in 2009 under the Customs Act 1901, was introduced to address the need for tariff concessions on certain imported goods that have no substitutable Australian-produced alternatives. This instrument facilitates the application of lower customs duty rates for specific goods, thereby promoting competitive pricing and encouraging importation where local production is not feasible. The Customs Act 1901, administered by the Chief Executive Officer of Customs, allows for the creation of Tariff Concession Orders (TCOs) to meet these objectives. The policy goal is to provide economic benefits by reducing the cost of importing certain goods, which in turn may lower prices for consumers and support industries that rely on imported materials or components. This initiative helps bridge gaps in domestic production and bolsters the competitiveness of Australian businesses in the global market.
Scope and Application
The Tariff Concession Instrument No. 0931142 applies to goods that are the subject of a Tariff Concession Order (TCO), which is issued under the authority of the Customs Act 1901. This instrument specifically concerns rock anchors and provides for a concession in the rate of customs duty applicable to these goods, making it free of duty instead of the general rate of 5%. The application of this TCO is determined by the Chief Executive Officer of Customs, who must assess whether the goods in question meet the core criteria outlined in the Act, primarily that no substitutable goods are produced in Australia. The TCO extends its application to all relevant rock anchors, providing a tariff benefit to those who import these goods under the specified terms. The instrument operates within the Commonwealth jurisdiction and does not extend to any other territories or states within Australia. Notably, the TCO does not disadvantage any persons or impose liabilities on them in respect of actions taken prior to its registration, safeguarding the rights of importers who can benefit from refunds of duty paid on rock anchors imported since the TCO's effective date.
Key Provisions
The main operative sections of this legislation are section 269C, 269B, 269D, 269E, 269P(3) and 269K(1) of the Customs Act 1901. These sections provide the framework for the application, assessment, and approval of Tariff Concession Orders (TCOs). Section 269C establishes the core criteria that an application must meet, while sections 269B, 269D and 269E define key terms used in the assessment of the application. Section 269P(3) mandates the CEO to issue a written TCO if the application meets the core criteria, and section 269K(1) requires the CEO to publish a notice in the Gazette and invite submissions regarding the application.
The Act imposes certain obligations on parties seeking a TCO. For example, an applicant must ensure that their application complies with the core criteria set out in section 269C. This includes demonstrating that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. Additionally, the CEO has the obligation to assess the application against the core criteria, consult with the public if necessary, and make a decision on whether to issue a TCO. The CEO must also publish a notice in the Gazette inviting submissions from interested parties.
Failure to comply with the requirements of the Act may result in various civil or criminal consequences. For example, if an applicant submits a false or misleading application, they may be subject to penalties under section 282 of the Customs Act 1901. This can include fines of up to $22,200 for individuals and $111,000 for corporations. Additionally, if an entity uses goods subject to a TCO in a manner that is not in accordance with the terms of the TCO, they may face penalties under section 147 of the Customs Act 1901, which can include fines of up to $111,000 for individuals and $555,000 for corporations. It is important to note that these penalties are in addition to any other remedies or sanctions that may be available under other legislation.
In summary, the Tariff Concession Instrument No. 0931142 sets out the process for applying for and issuing a TCO under the Customs Act 1901. The Act imposes obligations on applicants and the CEO, and failure to comply with these obligations can result in civil or criminal penalties. The TCO in question relates to certain rock anchors and provides for a lower rate of customs duty on these goods. The rights of importers will be beneficially affected, as they 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.