EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0506931
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.
Plastic Plumbing Supplies Pty Ltd applied for a TCO in respect of certain Pipe Fittings on 7 June 2005.
Instrument
TCO No 0506931 was made on 21 October 2005. It declares that those certain Pipe Fittings 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. 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. 0506931 is taken to have come into force on 7 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 Customs Act 1901 was enacted by the Australian Parliament to regulate the importation of goods into Australia and to collect customs duty on these goods. The introduction of Part XVA of the Act, which allows for Tariff Concession Orders (TCOs), was intended to address the problem of ensuring that imported goods are subject to competitive pricing when there are no locally produced alternatives. Under this scheme, the Chief Executive Officer of Customs can grant tariff concessions, thereby reducing the customs duty on specific imported goods. The policy objective is to encourage the use of imported goods by lowering their cost, which can help maintain competitive market prices and benefit consumers.
On 21 October 2005, Tariff Concession Order No. 0506931 was enacted following an application by Plastic Plumbing Supplies Pty Ltd for certain Pipe Fittings. The Chief Executive Officer of Customs was satisfied that no substitutable goods were produced in Australia, meeting the core criteria for a tariff concession. As a result, the order declares that these Pipe Fittings are subject to a 0% duty rate, down from the general 5% duty rate, starting from 7 June 2005, the date the application was lodged. No submissions were received in opposition to the concession, and it does not disadvantage any person or impose new liabilities on anyone, except to beneficially affect the rights of importers who can apply for a refund of duty on goods imported since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0506931 under the Customs Act 1901 applies to the specific goods, namely certain Pipe Fittings, for which Plastic Plumbing Supplies Pty Ltd applied for a Tariff Concession Order (TCO). The Act allows for the reduction of customs duty rates on goods not produced in Australia that meet the specified criteria. The application process involves the Chief Executive Officer of Customs (CEO) determining if the goods qualify under the core criteria outlined in the Act, which include the absence of substitutable goods produced in Australia and the specific definition of terms such as 'substitutable goods' and 'ordinary course of business'. Once the CEO is satisfied that the application meets these criteria, a TCO is issued, reducing the customs duty rate for the specified goods from 5% to 0%. The application of this legislation is jurisdictional under the Commonwealth and extends to any goods imported into Australia subject to the conditions set forth in the Act. There are no exclusions or exemptions specified for this particular TCO, and the commencement of the order is effective from the date the application was lodged, which is 7 June 2005, as per the Customs Act 1901. The TCO does not impact existing rights or impose liabilities for actions taken prior to its registration.
Key Provisions
The primary operative sections of the Customs Act 1901 (the Act) relevant to Tariff Concession Orders (TCOs) include sections 269F, 269C, 269B, 269D, 269E, 269P(3), and 269S(1). Section 269F allows for an application to be made to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. The CEO must then determine if the application meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Definitions for key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269B, 269D, and 269E respectively. If the CEO is satisfied that the application meets the criteria, they must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff). Section 269S(1) specifies that a TCO comes into force on the day the application for the TCO was lodged.
The obligations and requirements imposed by the Act on the parties or entities it governs include the obligation for the CEO to assess the validity of TCO applications against the core criteria. The CEO must also ensure that any TCO applications that meet these criteria are processed and made in writing. Additionally, section 269K(1) mandates that as soon as practicable after accepting a TCO application as valid, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may have reasons why the TCO should not be made. The CEO must consider any submissions received and make a decision based on the information available. In the case of TCO No. 0506931, the CEO did not receive any submissions.
The Act also outlines consequences for non-compliance with its provisions. Although the explanatory statement does not explicitly detail offences, penalties, or civil/criminal consequences for breach, it is implied that failure to adhere to the statutory requirements for making TCOs could result in legal repercussions. The Customs Act 1901 and related regulations provide for various penalties, including fines and imprisonment for breaches of customs legislation, although the specific penalties are not detailed in this explanatory statement. Furthermore, the TCO itself ensures that the rights of importers are beneficially affected and that no person, other than the Commonwealth, is disadvantaged or imposed with liabilities due to the TCO.