EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1026489
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.
Hewsaw Pty Ltd applied for a TCO in respect of certain in line saw parts on 11 June 2010.
Instrument
TCO No 1026489 was made on 06 September 2010. It declares that those certain in line saw parts 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. 1026489 is taken to have come into force on 11 June 2010.
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 Commonwealth Parliament, provides a framework for administering customs and excise duties and regulating the import and export of goods. This legislation aims to facilitate international trade while ensuring that the government's revenue is protected and that the customs border is effectively managed. Tariff Concession Instrument No. 1026489, made under the Customs Act, addresses the specific issue of providing tariff concessions for certain in line saw parts. Hewsaw Pty Ltd applied for these concessions on 11 June 2010, and the instrument was subsequently made on 6 September 2010, declaring that these goods are subject to a free rate of duty, as no substitutable goods were produced in Australia. The policy objective of this instrument is to benefit importers by potentially reducing their duty liabilities for these goods, thereby encouraging the importation of these specific items.
Scope and Application
The Customs Act 1901, specifically Part XVA, governs the application and administration of Tariff Concession Orders (TCOs), which are designed to reduce the customs duty on certain goods. This legislation applies to entities and individuals who seek to import goods that are eligible for tariff concessions under specific conditions. The Act allows the Chief Executive Officer of Customs to approve TCO applications if no substitutable goods are produced in Australia in the ordinary course of business, as defined under the Act. This instrument is applicable across Australia, encompassing all states, territories, and federal jurisdictions, thereby ensuring a uniform approach to tariff concessions. The legislation does not apply to goods specified in section 269SJ, which are ineligible for tariff concessions. Furthermore, the application of the Act can be extended or restricted through subordinate instruments, allowing for flexibility in the implementation of tariff policies. TCO No. 1026489, for instance, was made effective from 11 June 2010, and it grants free duty on certain in-line saw parts, which would otherwise attract a 5% duty rate.
Key Provisions
The Tariff Concession Instrument No. 1026489 under the Customs Act 1901 (section 269F) primarily involves the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders apply lower rates of customs duty to specified goods. In this instance, Hewsaw Pty Ltd applied for a TCO concerning certain in line saw parts on 11 June 2010, which was subsequently granted on 6 September 2010. This TCO declared that the specified in line saw parts are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free, as opposed to the general rate of 5%.
The obligations imposed by the Act on the parties involved include the requirement for the CEO to assess applications against the core criteria set out in sections 269C and 269SJ of the Customs Act 1901. If the application for a TCO does not involve goods specified in section 269SJ, and the CEO is satisfied that no substitutable goods were produced in Australia in the ordinary course of business, the CEO is obligated to make a written TCO order. Additionally, as per section 269K(1), the CEO must publish a notice in the Gazette, inviting any interested parties to lodge submissions opposing the TCO. In this case, no submissions were received.
The Act also imposes specific consequences for breaches of its provisions. However, the explanatory statement does not provide detailed information on offences, penalties, or civil/criminal consequences for breach of the TCO or related provisions within the Customs Act 1901. The TCO does not affect the rights of any person, except the Commonwealth, in a way that disadvantages them or imposes liabilities for actions taken before the TCO registration date. Importers of the specified goods can benefit by applying for a refund of duty on goods imported since the day the TCO was taken to have come into force.