EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0936824
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 Australasia Pty Ltd applied for a TCO in respect of certain nylon plug screws on 29 September 2009.
Instrument
TCO No 0936824 was made on 25 January 2010. It declares that those certain nylon plug 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 10%. 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. 0936824 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for the regulation of customs duties and other charges, including the establishment of a scheme for Tariff Concession Orders (TCOs) under Part XVA. This legislative instrument addresses the gap by enabling the reduction or exemption of customs duties on certain imported goods, provided they meet specific criteria and no substitutable goods are produced in Australia. The objective of this Act is to facilitate trade by offering tariff concessions where appropriate, thereby promoting economic efficiency and fairness in the imposition of customs duties. The Chief Executive Officer of Customs (CEO) is empowered to make these orders, subject to certain conditions and after considering applications from interested parties, ensuring a balanced approach to trade facilitation and domestic industry protection.
Scope and Application
The Tariff Concession Instrument No. 0936824, made under the Customs Act 1901, applies to any person or entity that seeks a tariff concession on imported goods, specifically in this case, certain nylon plug screws. The Act allows the Chief Executive Officer of Customs to grant tariff concessions if certain criteria are met, such as the absence of substitutable goods being produced in Australia. This instrument has a Commonwealth reach, operating under federal jurisdiction. The concession does not apply to goods specified in section 269SJ of the Act, which cannot be subject to a tariff concession. The TCO was published in the Gazette, inviting any interested parties to lodge a submission; however, no submissions were received. The tariff concession effectively commenced on the date of the application, 29 September 2009. Importantly, the TCO does not adversely affect any person's rights as at the date of registration and does not impose any liabilities on persons other than the Commonwealth.
Key Provisions
The key provisions of the Customs Act 1901, as amended by Tariff Concession Instrument No. 0936824, pertain to Tariff Concession Orders (TCOs) under section 269F (1). The instrument specifically addresses the application made by Power Fasteners Australasia Pty Ltd for certain nylon plug screws, and the corresponding tariff concession granted under item 50 of Schedule 4 to the Customs Tariff Act 1995. Under section 269C of the Customs Act, the Chief Executive Officer of Customs (CEO) is mandated to assess whether the application meets the core criteria, which include the condition outlined in section 269P(3) that no substitutable goods were produced in Australia on the date the application was lodged.
In fulfilling their role, the CEO is required to publish a notice in the Gazette as per subsection 269K(1) of the Customs Act, inviting any interested parties to submit their views on whether the TCO should be made. In this case, no submissions were received in response to the published notice. As per subsection 269S(1) of the Customs Act, the TCO is considered to have come into force on the date the application was lodged, which in this instance was 29 September 2009. It is also important to note that the TCO does not affect any rights of persons, other than the Commonwealth, as at the date of registration, nor does it impose any liabilities on any person.
The obligations imposed by the Customs Act on parties such as Power Fasteners Australasia Pty Ltd and the CEO include the requirement for the applicant to submit a valid application for a TCO, ensuring that the application meets the core criteria. The CEO, upon receiving the application, must assess whether the criteria are satisfied and decide on the making of a TCO. Additionally, the CEO must publish a notice in the Gazette to allow for any objections or submissions regarding the TCO. Both parties must adhere to the legal processes and timelines set out in the Customs Act.
Breaching the provisions of the Customs Act related to TCOs may result in civil or criminal consequences. For instance, making a false statement in an application for a TCO may be considered an offence under section 270 of the Customs Act, with potential penalties including fines and imprisonment. The exact penalties are not specified in the explanatory statement, but the Act provides for a range of penalties for various breaches of customs regulations, including fines that may extend to the greater of three times the amount of duty evaded or $11,000, and imprisonment for up to five years for serious offences. The imposition of these penalties would depend on the nature and severity of the breach.