EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0945729
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.
Reliance Worldwide applied for a TCO in respect of certain stainless steel grab rings on 05 january 2009.
Instrument
TCO No 0945729 was made on 27 March 2009. It declares that those certain stainless steel grab rings 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. 0945729 is taken to have come into force on 05 January 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. 0945729, enacted under the Customs Act 1901, addresses the need to provide tariff concessions for specific goods, thereby facilitating trade and economic benefits. This instrument was introduced to streamline the process by which the Chief Executive Officer of Customs can grant tariff concessions for goods not produced in Australia, thereby avoiding the imposition of customs duties on these imported items. The policy objective of this legislative instrument is to support Australian trade by reducing the tariff burden on imported goods, provided they are not substitutable by locally produced goods. The instrument was enacted to ensure that the application process is transparent and includes an opportunity for public input, although in this instance, no submissions were received against the concession for stainless steel grab rings. The instrument came into force on the date the application was lodged, ensuring that any rights or liabilities are not adversely affected prior to its enactment.
Scope and Application
The Customs Act 1901 applies to individuals and entities seeking tariff concessions on imported goods, specifically those who wish to have a lower rate of customs duty applied to goods they import into Australia. This Act, under Part XVA, empowers the Chief Executive Officer of Customs (CEO) to grant Tariff Concession Orders (TCOs) based on certain criteria. A TCO can be applied for by any person, provided the goods in question are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The CEO must ensure that the application meets the core criteria, notably that no substitutable goods were produced in Australia at the time of application, as defined in sections 269C, 269D, and 269E of the Act. If the application is approved, a TCO is issued, reducing the customs duty on the specified goods. The geographic reach of this legislation is national, as it applies to all imports into Australia. The TCO instrument does not affect the rights of any person except to beneficially alter the duty on the specified goods, and it does not impose any liabilities on any person. The application process involves publishing a notice in the Gazette and considering any submissions received, although in this instance, no submissions were lodged.
Key Provisions
The Customs Act 1901 (section 269F) allows for the application of Tariff Concession Orders (TCOs) for certain goods. These orders are granted by the Chief Executive Officer of Customs (CEO) if the application meets specific criteria, such as the absence of substitutable goods produced in Australia in the ordinary course of business (section 269C). In the case of Reliance Worldwide, a TCO was applied for concerning stainless steel grab rings on 5 January 2009, and granted on 27 March 2009, as detailed in Tariff Concession Instrument No. 0945729. This instrument specifies that these particular stainless steel grab rings are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with a duty rate of free instead of the general 5% rate.
The obligations imposed by the Act on parties applying for a TCO include ensuring that the goods in question do not have substitutable equivalents produced domestically, as outlined in sections 269D, 269E, and 269F. The CEO must also publish a notice in the Gazette inviting submissions from interested parties, although in this case, no submissions were received (subsection 269K(1)). The TCO comes into effect on the date of the application (subsection 269S(1)), meaning that the concession applies retroactively from 5 January 2009.
There are no specified offences, penalties, or civil/criminal consequences for breach of the TCO provisions within the Act itself. However, the act of applying for and being granted a TCO without meeting the specified criteria could potentially lead to administrative penalties or legal challenges regarding the validity of the TCO. Importers, however, benefit from the ability to apply for duty refunds on imports made since the effective date of the TCO (paragraph 126(1)(r) of the Regulations). The TCO does not disadvantage any persons or impose liabilities on anyone except the Commonwealth.