EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0509579
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.
Marubeni-Itochu Tubulars Oceania Pty Ltd applied for a TCO in respect of certain welded pipe on 21 July 2005.
Instrument
TCO No 0509579 was made on 14 October 2005. It declares that those certain welded pipes 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. 0509579 is taken to have come into force on 21 July 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, enacted by the Parliament of Australia, provides a framework for the imposition and collection of customs duties on imported goods. This Act, through its Part XVA, introduces the scheme for Tariff Concession Orders (TCOs) to facilitate reduced customs duty rates for certain goods. The Tariff Concession Instrument No. 0509579, introduced in 2005, addresses the specific need to grant tariff concessions to imported goods that do not have substitutable Australian-produced equivalents. The instrument was developed in response to an application by Marubeni-Itochu Tubulars Oceania Pty Ltd for tariff concessions on certain welded pipes, with the aim of ensuring that these goods are subject to a zero rate of duty, as opposed to the general 5% rate, thereby benefiting importers of these specific goods. The policy objective behind this instrument is to promote fair trade practices by ensuring that Australian businesses are not unduly disadvantaged by the importation of goods that are not locally produced.
Scope and Application
The Tariff Concession Instrument No. 0509579 under the Customs Act 1901 applies to specific goods that are the subject of a Tariff Concession Order (TCO), in this case, certain welded pipes applied for by Marubeni-Itochu Tubulars Oceania Pty Ltd. The Act allows the Chief Executive Officer of Customs to grant a TCO that lowers the customs duty rate for specified goods if certain criteria are met, namely that no substitutable goods are produced in Australia in the ordinary course of business. The instrument was made on 14 October 2005 and declares that the specified welded pipes are subject to a duty rate of free, as opposed to the general rate of 5%. This instrument has national jurisdictional reach as it is part of the Commonwealth's legislative framework. The TCO does not disadvantage any person except the Commonwealth and does not impose any liabilities on individuals or entities other than the Commonwealth. The instrument came into force on 21 July 2005, the date the application was lodged.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0509579, as referenced in the Customs Act 1901 (section 269P(3)), declare that certain welded pipes are goods to which item 50 of Schedule 4 to the Tariff applies. This concession makes the rate of duty for these pipes free, as opposed to the general rate of 5% (section 269P(3)). The instrument also stipulates that the concession is effective from the date the application for the tariff concession order was lodged, which was 21 July 2005 (subsection 269S(1)). It is important to note that this concession does not affect the rights of any person, except the Commonwealth, as at the date of registration, and does not impose any liabilities on any person in respect of actions taken before the date of registration (subsection 269S(2)).
The obligations imposed by this legislation primarily concern the Chief Executive Officer of Customs (the CEO), who must assess applications for tariff concession orders against the core criteria outlined in sections 269C, 269B, and 269D of the Customs Act 1901. If the CEO is satisfied that the application meets the core criteria and that no substitutable goods were produced in Australia in the ordinary course of business, they must make a written order (section 269P(3)). The CEO must also publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (subsection 269K(1)). Any submissions received must be considered before making a final decision on the application.
The Act imposes several requirements and consequences for breach of its provisions. Firstly, the CEO must ensure that any tariff concession order made is based on a valid application that meets the core criteria and is published in the Gazette with an invitation for submissions (subsection 269K(1)). Failure to adhere to these requirements could result in the tariff concession order being challenged or deemed invalid. Secondly, any person who knowingly provides false or misleading information in an application for a tariff concession order could be subject to penalties under the Customs Act 1901. The maximum penalty for such an offence is generally a fine of up to 10,000 penalty units or imprisonment for up to five years, or both (subsection 281A(1) of the Customs Act 1901). Additionally, any person who imports goods subject to a tariff concession order without complying with the conditions of the order could face civil or criminal penalties under the Customs Act 1901.
In summary, the Tariff Concession Instrument No. 0509579 establishes a lower rate of customs duty for certain welded pipes, effective from 21 July 2005, provided that the core criteria are met and no substitutable goods are produced in Australia. The CEO is responsible for assessing applications, making written orders, and publishing notices in the Gazette. Failure to comply with the Act's requirements or knowingly providing false information in an application could result in penalties under the Customs Act 1901, including fines and imprisonment.