EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0949212
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 self drilling screws on 16 December 2009.
Instrument
TCO No 0949212 was made on 5 March 2010. It declares that those certain self drilling 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. 0949212 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 Tariff Concession Instrument No. 0949212 was enacted under the Customs Act 1901, aiming to address the need for tariff concessions on specific goods to encourage their import and use within Australia. This instrument was introduced to provide relief from customs duty on certain self-drilling screws, effectively addressing the gap where such goods could not be produced locally or were not produced in the ordinary course of business. The instrument was created by the Chief Executive Officer of Customs, who determined that no substitutable goods were produced in Australia, thereby meeting the core criteria for a tariff concession order. The policy objective was to facilitate the import of these goods without imposing additional costs on importers, ultimately benefiting the market by making the goods more affordable and accessible.
The instrument was effective from the date the application was lodged, 16 December 2009, and did not disadvantage any existing rights of persons other than the Commonwealth. The implementation of this instrument ensures that importers of the specified goods can apply for a refund of duty from the date the concession came into effect, thereby promoting fair trade practices and supporting the importation of goods that are not locally produced.
Scope and Application
The Customs Act 1901, specifically through Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, thereby providing lower customs duty rates for certain goods. An application for a TCO can be submitted by any person, provided the goods in question do not fall under the category of items specified in section 269SJ of the Act, which are ineligible for such concessions. The CEO's decision to grant a TCO hinges on whether the applicant's goods meet the core criteria set out in section 269C of the Act, which necessitates the absence of substitutable goods produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. This Act applies across the Commonwealth of Australia and its territories, ensuring that the concessional tariff rates outlined in the Customs Tariff Act 1995 are uniformly administered. The application of a TCO, such as TCO No 0949212, which pertains to certain self-drilling screws and was made effective from 16 December 2009, is contingent upon the CEO's satisfaction that no substitutable goods are produced domestically, thereby allowing for a reduction in the duty rate from the general 5% to free.
Key Provisions
The Tariff Concession Instrument No. 0949212 under the Customs Act 1901 (section 269F) primarily focuses on establishing a lower rate of customs duty for specific goods through a Tariff Concession Order (TCO). The main operative sections in this context include sections 269C, 269B, and 269P, which detail the criteria for a TCO application to be considered valid. Section 269C specifies that a TCO application is valid if no substitutable goods are being produced in Australia on the date of the application. Section 269B defines key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods." Section 269P mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they must issue a written TCO. In this specific case, the CEO determined that certain self-drilling screws met the core criteria and thus issued TCO No. 0949212, which was registered on 5 March 2010.
The obligations imposed by the Act on parties governed by it include ensuring that applications for TCOs are made in accordance with the legislative requirements. The CEO must assess each application to determine if the goods in question are substitutable and if they are being produced in Australia. If the application satisfies the criteria, the CEO is required to issue a TCO. Additionally, the CEO must publish a notice in the Gazette inviting any person who may object to the issuance of the TCO to lodge a submission. In this case, the CEO published such a notice but did not receive any submissions.
In terms of breaches and penalties, the Customs Act 1901 does not explicitly outline penalties for non-compliance with TCO provisions. However, any failure to adhere to the terms of a TCO could potentially lead to civil or criminal consequences under other sections of the Act, such as fraudulent behaviour or misrepresentation in customs declarations. It is essential for applicants and beneficiaries of TCOs to ensure full compliance with the Act's provisions to avoid any adverse legal outcomes. The Act’s regulatory framework is designed to ensure that only eligible goods benefit from tariff concessions, thereby maintaining fairness and integrity in the customs duty regime.