EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1052240
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 Australasia Pty Ltd ATF Rawplug Unit Trust applied for a TCO in respect of certain fastening hand tool sets on 29 November 2010.
Instrument
TCO No 1052240 was made on 28 February 2011. It declares that those certain fastening hand tool sets 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. 1052240 is taken to have come into force on 29 November 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 the administration of customs and excise duties. It was introduced to address the need for a structured system of tariffs and regulations on imported goods to protect domestic industries, raise revenue, and regulate the flow of goods across borders. One of the mechanisms within the Act is the Tariff Concession Order (TCO) scheme, which allows for the reduction or elimination of customs duty on specific goods under certain conditions. The explanatory statement for Tariff Concession Instrument No. 1052240, made in 2011, outlines the process and criteria for the application of a TCO for certain fastening hand tool sets by Powers Fasteners Australasia Pty Ltd. The primary objective of this instrument was to ensure that no substitutable goods were produced in Australia, thereby qualifying the specified goods for a lower tariff rate under the Customs Tariff Act 1995. The instrument took effect from the date the application was lodged, and no submissions opposing the TCO were received, thereby facilitating a streamlined process for the benefit of importers eligible for duty refunds.
Scope and Application
The Tariff Concession Instrument No. 1052240, made under Part XVA of the Customs Act 1901, pertains to the application of tariff concessions on certain fastening hand tool sets. This Act applies to individuals or entities that import these specific goods, allowing them to benefit from a reduced customs duty rate. The geographic reach of this legislation is national, as it is enacted under the Commonwealth of Australia, thereby affecting all states and territories uniformly. The Act does not apply to goods specified in section 269SJ of the Customs Act 1901, which includes goods that are not eligible for tariff concessions. The CEO of Customs must ensure that no substitutable goods were produced in Australia at the time the application was lodged, as per sections 269C and 269D of the Act. This TCO, once registered, provides relief to importers by allowing them to claim refunds on duties paid before its effective date, without imposing any liabilities on them.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 1052240, under the Customs Act 1901, pertain to the establishment and effect of Tariff Concession Orders (TCOs) (ss. 269C, 269F, 269P). Section 269F allows for applications to the Chief Executive Officer of Customs (CEO) for a TCO, provided that the goods in question are not specified in section 269SJ, which lists goods ineligible for TCOs. Section 269C outlines the core criteria for a TCO, which includes the condition that no substitutable goods were produced in Australia on the day the application was lodged. Section 269P mandates that if the CEO is satisfied that the core criteria are met, a written TCO must be issued.
The obligations imposed by the Act on the parties or entities it governs are multifaceted. For the CEO, the primary obligation is to assess whether an application for a TCO meets the core criteria as stipulated in section 269C. If the CEO determines that no substitutable goods were produced in Australia, they must proceed to issue a TCO as specified in section 269P. Additionally, under section 269K, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may oppose the TCO, although in this case, no submissions were received. Importers of the affected goods are entitled to apply for a refund of duty paid on those goods since the day the TCO is deemed to have come into force (Reg. 126(1)(r)).
In terms of consequences for breach, the Act does not explicitly enumerate offences or penalties for failing to comply with the provisions related to TCOs. However, it is implicit that non-compliance with the conditions for issuing or applying for a TCO could lead to disputes or legal challenges, particularly if the CEO issues a TCO improperly or if an applicant seeks to exploit the TCO for goods that do not meet the statutory criteria. Given the nature of the legislation, breaches would likely be addressed through administrative review or judicial review rather than direct criminal or civil penalties as outlined in the Act.