EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1033088
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.
Minova Australia applied for a TCO in respect of certain bolts and or nuts and or plates on 20 July 2010.
Instrument
TCO No 1033088 was made on 11 October 2010. It declares that those certain bolts and or nuts and or plates 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. 1033088 is taken to have come into force on 20 July 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 was enacted to provide for the regulation of customs and excise, including the collection of duties and taxes on goods imported into Australia. The Act was introduced to address the need for a structured and efficient customs regime that could manage the flow of goods across Australia's borders while generating revenue for the government and protecting domestic industries. One of the key mechanisms within the Act is the ability for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) which reduce or eliminate customs duty on certain imported goods. This process is designed to ensure that Australia's trade policies remain competitive and that businesses can access necessary goods without undue financial burden. The objective of the legislation, as evidenced by the Tariff Concession Instrument No. 1033088, is to facilitate the import of goods by providing tariff concessions where appropriate, thereby supporting economic activity and trade.
Scope and Application
The Tariff Concession Instrument No. 1033088, made under the Customs Act 1901, pertains to the application of tariff concessions on certain bolts, nuts, and plates. The instrument applies to the entities or individuals who import these goods into Australia. It allows for a lower rate of customs duty, in this case, a rate of free duty as opposed to the general rate of 5%, provided that the application meets the core criteria specified in section 269C of the Act. The instrument's application is restricted geographically to Australia and is administered by the Chief Executive Officer of Customs, who must be satisfied that no substitutable goods are produced in Australia. The instrument does not affect any pre-existing rights of persons other than the Commonwealth and does not impose any liabilities on such persons. The instrument extends the application of the Customs Act by providing a mechanism through which certain goods can benefit from tariff concessions, subject to the CEO's determination.
Key Provisions
The Tariff Concession Order No. 1033088 under the Customs Act 1901 (section 269F) provides for a reduction in customs duty on certain bolts, nuts, and plates. This order was made by the Chief Executive Officer of Customs (CEO) on 11 October 2010, following an application by Minova Australia on 20 July 2010. The TCO applies to these specific goods by declaring them as items covered under item 50 of Schedule 4 to the Customs Tariff Act 1995, thereby granting a free rate of duty where the general rate is 5%.
To qualify for this concession, the CEO must determine that no substitutable goods are produced in Australia. This assessment hinges on the definitions provided under sections 269D (goods produced in Australia), 269E (ordinary course of business), and 269F (substitutable goods). The CEO's decision to issue the TCO follows the satisfaction of these core criteria, as outlined in section 269C of the Customs Act 1901.
The obligations imposed by this Act primarily involve ensuring that the application process for a Tariff Concession Order is thorough and transparent. The CEO must accept and process valid applications, publish notices in the Gazette to invite objections (section 269K(1)), and decide based on the received submissions. Furthermore, the CEO must ensure that the rights of third parties are not adversely affected by the issuance of the TCO, as stipulated in section 269S(1). The commencement date of the TCO is the day the application was lodged, which in this case was 20 July 2010.
In terms of consequences for non-compliance, the Customs Act 1901 does not explicitly outline specific offences, penalties, or civil/criminal consequences for breaches related to the issuance or application of a Tariff Concession Order. However, general provisions within the Act might still apply, and failure to adhere to the terms and conditions of the TCO could potentially lead to administrative penalties or other legal repercussions as deemed appropriate under the broader legislative framework. The rights of importers are protected under paragraph 126(1)(r) of the Regulations, which allows for duty refunds on goods imported since the TCO's effective date.