EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0934716
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 Australia applied for a TCO in respect of certain screws on 16 September 2009.
Instrument
TCO No 0934716 was made on 04 December 2009. It declares that those certain screws 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. 0934716 is taken to have come into force on 16 September 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 Australian Parliament, establishes a framework through which the Chief Executive Officer of Customs can grant Tariff Concession Orders (TCOs) that reduce customs duty on specific goods. This legislative instrument addresses the need for flexibility in tariff rates to support industries that may lack domestic production capacity for certain goods. TCOs are intended to encourage competition and protect Australian industries from foreign competition by ensuring that only non-Australian produced goods benefit from the tariff concession. In the context of Tariff Concession Instrument No. 0934716, Power Fasteners Australia applied for a TCO concerning certain screws, which was granted on 4 December 2009, after it was determined that no substitutable goods were produced in Australia. The policy objective is to facilitate the importation of these goods at a reduced duty rate, thereby benefiting importers and potentially enhancing market competitiveness.
Scope and Application
The Tariff Concession Instrument No. 0934716, made under the Customs Act 1901, applies to specific goods that are the subject of a Tariff Concession Order (TCO). This Act facilitates a process where a person can apply to the Chief Executive Officer of Customs for a TCO, which, if approved, allows for a lower rate of customs duty on the specified goods. The application process requires the CEO to assess whether the goods in question meet the core criteria, such as the absence of substitutable goods produced in Australia at the time of application. Once a TCO is issued, it applies retroactively from the date the application was lodged. The geographic reach of this Act is national, as it is a Commonwealth instrument, and it applies to any entity or individual importing the specified goods into Australia. There are exclusions in the Act, notably concerning goods specified in section 269SJ that cannot be subject to a TCO. Additionally, the application and approval process is outlined in the Act, which may be further detailed through subordinate instruments. The rights of importers are protected under this legislation, allowing them to apply for duty refunds on goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of the Tariff Concession Order No. 0934716 (TCO) under the Customs Act 1901 are sections 269C, 269F, 269P, and 269S. Section 269F allows for an application to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the CEO is satisfied that the application meets the core criteria, they must make a written order under section 269P. Section 269C specifies that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The TCO itself, under section 269S, is deemed to come into force on the day the application is lodged, thus providing immediate effect from that date.
The Act imposes several obligations and requirements on the parties involved. Firstly, the applicant must ensure that the goods for which they are seeking a TCO are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The CEO must then assess whether the application meets the core criteria, specifically that no substitutable goods were produced in Australia in the ordinary course of business at the time of application. If the CEO is satisfied that the application meets these criteria, they must make a TCO. The CEO is also required to publish a notice in the Gazette as soon as practicable after accepting the application as valid, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission.
There are no specific offences, penalties, or civil/criminal consequences detailed for breaching the provisions of this TCO. However, it is important to note that the Customs Act 1901, in general, provides for various offences and penalties for breaches related to customs duties and regulations. These can include fines and imprisonment for serious breaches. The TCO itself does not specify any additional penalties for its breach but operates within the broader legal framework of the Customs Act, which includes enforcement provisions against non-compliance.
The TCO ensures that the rights of persons other than the Commonwealth are not adversely affected as at the date of registration. Specifically, it states that it does not impose any liabilities on any person and does not disadvantage anyone. Importers, however, benefit from the TCO as they can apply for a refund of duty on goods imported since the TCO is deemed to have come into force. This provision ensures that the benefits of the TCO are applied retroactively from the date of the application, allowing for potential financial relief for those who imported the goods during the period before the TCO was officially registered.