EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0949209
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.
Powers Fasteners applied for a TCO in respect of certain chipboard screws on 16 December 2009.
Instrument
TCO No 0949209 was made on 22 March 2010. It declares that those certain chipboard 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. 0949209 is taken to have come into force on 16 December 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 administration of customs duties, including the establishment of Tariff Concession Orders (TCOs) to lower the duty rates on certain goods. This legislation aims to address the gap in ensuring that Australian businesses have access to competitively priced goods that are not produced domestically. The Tariff Concession Instrument No. 0949209, published on 22 March 2010, was introduced to provide a tariff concession for specific chipboard screws, effectively reducing their duty rate from 5% to free. This was achieved after Powers Fasteners applied for the concession on 16 December 2009, and the Chief Executive Officer of Customs confirmed that no substitutable goods were produced in Australia. The policy objective behind this concession is to support Australian businesses by making imported goods more affordable, thus fostering economic efficiency and competitiveness.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework for Tariff Concession Orders (TCO) which can be applied for by any person seeking a reduction in customs duty on certain goods. This Act applies to entities and individuals who are involved in the import of goods that may qualify for a tariff concession. The scope of the Act is primarily concerned with the production of goods within Australia and whether these goods are substitutable to those for which the concession is sought. The geographic reach of this Act is national, given it is a Commonwealth Act. The Act excludes certain goods from being subject to a TCO as specified in section 269SJ. The application of the Act can be extended or clarified through subordinate instruments such as regulations and orders made by the Chief Executive Officer of Customs. For instance, TCO No 0949209, which was applied for by Powers Fasteners for certain chipboard screws, exemplifies the application of the Act in providing tariff concessions for specific imported goods.
Key Provisions
The primary operative sections of the Customs Act 1901, particularly relevant to Tariff Concession Orders (TCOs), include sections 269C, 269B, 269D, 269E, 269F, and 269P. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO regarding certain goods. The CEO is required to consider whether the application meets the core criteria outlined in sections 269C and 269B, which involve ensuring that no substitutable goods were produced in Australia in the ordinary course of business. If the application meets these criteria, the CEO must issue a TCO, as mandated by section 269P(3), which specifies a lower rate of customs duty for the goods in question.
The obligations imposed by the Customs Act 1901 on parties subject to TCOs are primarily administrative and procedural. The CEO must ensure that any application for a TCO is assessed against the core criteria and must publish a notice in the Gazette inviting any interested party to submit objections or submissions if they believe the TCO should not be granted. In the case of TCO No. 0949209, the CEO followed these steps, resulting in the concession being granted to Powers Fasteners for certain chipboard screws, effective from 16 December 2009. Importers of these goods can benefit by applying for a refund of duties paid since the TCO's effective date under the Customs Act 1901.
The Customs Act 1901 does not explicitly state specific offences or penalties for breaching the requirements of a TCO. However, general legal consequences for non-compliance with Australian customs laws may include fines and potential criminal charges for fraudulent activities. The penalties for breaches of the Customs Act 1901 can be severe, with fines and imprisonment possible depending on the nature and severity of the breach. The Act also includes provisions for civil and administrative penalties, which can further deter non-compliance. The exact penalties would be determined by the specific breach and relevant legislation.