EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0506772
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.
Woodside Energy Ltd applied for a TCO in respect of certain Buttweld Fittings on 6 June 2005.
Instrument
TCO No 0506772 was made on 24 October 2005. It declares that those certain Buttweld Fittngs 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 0%.
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. One submission objecting to the TCO application was received from Omega Stainless Steel Products Pty Ltd.
Further, subsection 269M(1) of the Act provides that if the CEO considers that, in relation to a particular TCO application, a person may have reason to oppose the making of the TCO to which the application relates, he or she may, by notice in writing, invite the person to lodge a written submission with the CEO. The CEO invited Pacific Hoseflex Pty Ltd and AAP Industries to lodge a written submission.
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. 0506772 is taken to have come into force on 6 June 2005.
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. 0506772 was enacted in 2005 under the Customs Act 1901, aiming to address the problem of providing tariff concessions for certain goods that do not have Australian-made substitutes. This legislation facilitates the application process for Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs can apply lower rates of customs duty on specified goods, provided they meet the core criteria stipulated in the Act. This instrument was specifically introduced to benefit importers by allowing them to apply for refunds of duty on goods imported since the TCO was deemed to have come into force. The enactment body is the Commonwealth of Australia, with the policy objective of supporting industries by reducing the duty on imported goods that are not produced domestically, thereby fostering competitiveness and potentially encouraging domestic production in the long term.
Scope and Application
The Customs Act 1901 provides a framework under which Tariff Concession Orders (TCOs) can be made, facilitating lower rates of customs duty for specified goods. These orders apply to goods that are the subject of an application, provided that the application is not for goods explicitly prohibited by section 269SJ of the Act. The process for creating a TCO begins with an application to the Chief Executive Officer of Customs (CEO), who evaluates the application against core criteria outlined in sections 269C and 269S of the Act. If the application meets these criteria, the CEO must issue a written TCO, as occurred in the case of TCO No. 0506772 for certain Buttweld Fittings. This particular TCO applies to goods specified in item 50 of Schedule 4 to the Customs Tariff Act 1995 and was made effective from the date of application, 6 June 2005. The CEO is also required to publish notices in the Gazette to invite objections and submissions from interested parties, as was done in the case of Woodside Energy Ltd's application, which received an objection from Omega Stainless Steel Products Pty Ltd. This legislative instrument extends to the national level, affecting the rights of importers in a beneficial manner, including the ability to apply for refunds on duties paid before the TCO's effective date.
Key Provisions
The primary operative sections of this legislation are sections 269C, 269F, 269K, 269M, and 269S of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. If the CEO is satisfied that the application meets the core criteria set out in section 269C, and no substitutable goods are produced in Australia, the CEO must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. This particular order, TCO No. 0506772, declares that certain Buttweld Fittings are subject to item 50 of Schedule 4 to the Tariff, resulting in a zero percent duty rate instead of the general rate of 5%.
The obligations imposed by the Act on the CEO include assessing whether an application for a TCO meets the core criteria, which involves determining whether substitutable goods are produced in Australia. The CEO is also required to publish a notice in the Gazette inviting submissions from interested parties and to consider any submissions received, as per sections 269K and 269M. The CEO must ensure that the rights of importers are not adversely affected by the TCO, and that the TCO does not impose any liabilities on any person other than the Commonwealth.
In terms of the consequences for breach, the Act does not explicitly detail offences, penalties, or civil/criminal consequences for non-compliance with the TCO provisions. However, the Act’s purpose is to facilitate tariff concessions under specific conditions, and failure to adhere to these conditions could potentially lead to legal challenges or disputes regarding the validity of the TCO. The Act ensures that the rights of importers are protected and that the TCO does not disadvantage any person other than the Commonwealth, thereby maintaining the integrity of the customs duty system.