EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1044632
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 tapping screws on 01 October 2010.
Instrument
TCO No 1044632 was made on 20 December 2010. It declares that those certain self tapping 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. 1044632 is taken to have come into force on 01 October 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 Tariff Concession Instrument No. 1044632, made under the Customs Act 1901, was enacted to address the need for a streamlined process in granting tariff concessions for specific goods. This legislative instrument was introduced to facilitate the application process for Tariff Concession Orders (TCOs), allowing for a lower rate of customs duty on goods specified in such orders. Enacted by the Chief Executive Officer of Customs, the policy objective is to ensure that the application process is transparent and accessible while maintaining the integrity of the tariff system by preventing the granting of concessions to goods that can be substituted by Australian-made products.
The instrument was created in response to an application by Powers Fasteners for tariff concessions on certain self-tapping screws, effective from 1 October 2010. Following a determination that no substitutable goods were produced in Australia, a TCO was issued, resulting in these screws being subject to a zero rate of duty instead of the general 5% rate. This legislative measure ensures that the process is both timely and consultative, with no adverse effects on the rights of non-Commonwealth entities, while positively impacting importers by allowing them to seek duty refunds for imports made since the TCO's effective date.
Scope and Application
The Tariff Concession Instrument No. 1044632 pertains to the Customs Act 1901 and specifically addresses the scheme for Tariff Concession Orders (TCOs) that can be issued by the Chief Executive Officer of Customs. This instrument applies to any person or entity seeking a concession on customs duties for goods specified in the application. The scope of this Act is limited to goods that do not have substitutable products produced domestically in the ordinary course of business, and it mandates the application process as outlined in sections 269C and 269SJ of the Customs Act. The instrument is geographically applicable across the Commonwealth of Australia, extending its reach to all importers and exporters who are subject to customs duties. It is important to note that this TCO does not affect the rights of any person, except the Commonwealth, concerning actions taken prior to the registration of the TCO. The instrument also clarifies that it imposes no new liabilities on any person and is designed to benefit importers by potentially allowing them to claim refunds on duties paid on goods imported since the effective date of the TCO. The CEO is required to consult with the public, inviting submissions against the TCO, although in this instance, no submissions were received. The TCO itself comes into force on the date the application was lodged, which in this case was 1 October 2010.
Key Provisions
The Customs Act 1901 (the Act) establishes a framework for the creation of Tariff Concession Orders (TCOs) through Part XVA, which enables the Chief Executive Officer of Customs (the CEO) to reduce customs duty on specific goods. A TCO can be applied for by any person under section 269F, provided the goods in question are not specified in section 269SJ as ineligible for such concessions. For a TCO to be considered, the CEO must first determine if the application meets the core criteria outlined in section 269C. This involves ensuring that, on the date the application is lodged, no substitutable goods are being produced in Australia in the ordinary course of business.
The Act further defines these terms in sections 269D, 269E, and 269F, providing clarity on what constitutes 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods'. Once the CEO confirms that the application meets the criteria, they are required, under subsection 269P(3), to issue a written TCO, specifying the prescribed item in Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question.
The obligations imposed by the Act on the parties involved primarily focus on the application process and the CEO's role in assessing and approving TCOs. The CEO must ensure that all applications are valid and that the core criteria are met. Additionally, under subsection 269K(1), the CEO is required to publish a notice in the Gazette, inviting any interested parties to lodge submissions opposing the TCO if they believe it should not be granted. In this instance, the CEO did not receive any submissions.
In terms of consequences for non-compliance or breach of the Act, the specific offences, penalties, or consequences are not detailed in the provided text. However, it is clear that the Act is designed to protect the interests of the Commonwealth and ensure that the rights of individuals are not adversely affected by the implementation of TCOs. Any person who feels disadvantaged or believes they have incurred liabilities as a result of a TCO may have recourse under the Act, although specific legal actions or penalties are not outlined here.