EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0936713
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.
Fasteners Australasia Pty Ltd applied for a TCO in respect of certain screw fixing plugs on 29 September 2009.
Instrument
TCO No 0936713 was made on 18 December 2009. It declares that those certain screw fixing plugs 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. 0936713 is taken to have come into force on 29 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 Tariff Concession Instrument No. 0936713 was introduced under the Customs Act 1901 to address the need for tariff concessions on certain goods, thereby facilitating trade and economic activities. This instrument was enacted by the Chief Executive Officer of Customs in accordance with the authority granted by section 269F of the Act. The primary objective of this legislation is to ensure that if an application for a Tariff Concession Order (TCO) is made and meets the core criteria specified in section 269C of the Act, the CEO is required to make a TCO that reduces the customs duty on the specified goods. In this particular instance, Fasteners Australasia Pty Ltd successfully applied for a TCO concerning certain screw fixing plugs, resulting in a tariff concession that set the duty rate at zero, down from the general rate of 5%. The instrument came into effect on the date the application was lodged, 29 September 2009, without affecting any pre-existing rights or imposing new liabilities on non-Commonwealth entities.
Scope and Application
The Customs Act 1901, specifically through Part XVA, facilitates the application of tariff concession orders (TCOs) which provide for a lower rate of customs duty on certain goods, as determined by the Chief Executive Officer (CEO) of Customs. The application process is governed by section 269F, whereby a person can apply for a TCO for goods, provided these do not fall under the restricted category outlined in section 269SJ. For an application to meet the core criteria, it must demonstrate that, on the date of application, no substitutable goods are produced in Australia in the ordinary course of business, as stipulated in sections 269C and 269D. Once the CEO is satisfied with the application, they must issue a TCO, which was the case with Fasteners Australasia Pty Ltd's application for certain screw fixing plugs on 29 September 2009. This resulted in TCO No. 0936713, which took effect on the date of application and reduced the duty rate for these specific goods from 5% to free. The application process also requires the CEO to publish a notice in the Gazette inviting submissions from any interested parties, although in this instance, no submissions were received. The TCO does not affect any pre-existing rights of individuals or entities other than the Commonwealth and does not impose any liabilities.
Key Provisions
The Tariff Concession Instrument No. 0936713 pertains to the Customs Act 1901 and establishes the conditions under which a Tariff Concession Order (TCO) can be granted. Section 269F of the Act allows individuals or entities to apply for a TCO, provided the goods in question are not specified in section 269SJ, which lists goods ineligible for TCOs. For a TCO to be considered, the Chief Executive Officer (CEO) of Customs must be satisfied that the application meets the core criteria as outlined in section 269C of the Act. This means that, on the date the application was submitted, no substitutable goods were being produced in Australia in the ordinary course of business. Definitions for key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively. If the CEO determines that the application meets these criteria, a written order is issued under section 269P(3) of the Act, specifying that the goods in question are subject to a prescribed rate of duty.
The obligations under this Act require that the CEO of Customs must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested parties to submit reasons why the TCO should not be granted, as per subsection 269K(1) of the Act. For the specific TCO No. 0936713, which pertains to certain screw fixing plugs, the CEO did not receive any submissions opposing the order. Furthermore, under subsection 269S(1), the TCO is considered effective from the date the application was lodged, in this case, 29 September 2009. Importantly, this TCO does not disadvantage any person, nor does it impose liabilities on anyone in respect of actions taken before the TCO came into effect, while potentially benefiting importers by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO.
In terms of penalties and consequences, the Act does not explicitly state any specific offences, penalties, or civil or criminal consequences for breaches related to TCO applications. However, it is implicit that any non-compliance with the requirements of the Act or the conditions of a TCO could lead to general legal consequences under the Customs Act 1901 or other relevant legislation. These might include fines, penalties for incorrect duty payments, or other administrative actions taken by the Australian Customs and Border Protection Service. The exact penalties would depend on the nature and severity of the breach, as well as any other applicable laws or regulations.