EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0514065
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.
Van Leeuwen Pipe & Tube Aust Pty Ltd applied for a TCO in respect of certain Cold Drawn Tubes on 10 October 2005.
Instrument
TCO No 0514065 was made on 3 January 2006. It declares that those certain Cold Drawn Tubes 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. 0514065 is taken to have come into force on 10 October 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, as amended, includes provisions under Part XVA that allow for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act was enacted to facilitate the reduction of customs duty rates on specified goods that are not produced domestically, thereby encouraging the importation of such goods. The application process for a TCO involves meeting specific core criteria, including the absence of substitutable goods produced in Australia, as outlined in sections 269C and 269SJ. The Tariff Concession Instrument No. 0514065, enacted in 2006, addresses the specific case of Cold Drawn Tubes, granting a zero percent duty rate instead of the general 5 percent. This instrument was introduced to assist Van Leeuwen Pipe & Tube Aust Pty Ltd and was made effective from the date of the application, 10 October 2005, with no submissions opposing the order. The overall policy objective is to support the importation of goods that are not domestically produced, potentially benefiting importers by reducing their duty costs.
Scope and Application
The Tariff Concession Order No. 0514065 under the Customs Act 1901 applies to the specific category of Cold Drawn Tubes, granting them a concessional rate of customs duty as outlined in the order. The Act allows for Tariff Concession Orders (TCOs) to be made by the Chief Executive Officer of Customs, which can lower the rate of customs duty for certain goods, provided no substitutable goods are produced in Australia in the ordinary course of business. The order is applicable to the entity that applied for it, Van Leeuwen Pipe & Tube Aust Pty Ltd, and specifically affects the conduct of importing these goods into Australia. The geographic reach of this legislation is national, as it pertains to customs duties at a Commonwealth level. The order does not disadvantage any person other than the Commonwealth and does not impose any new liabilities, but rather provides a benefit to importers who can apply for a refund of duty on goods imported since the date the TCO is taken to have come into force. The application of the TCO is extended through subordinate instruments, which may provide further detail on the application and administration of the concessions.
Key Provisions
The primary operative sections of this legislation revolve around the making and effects of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. The CEO is required to consider whether the application meets the core criteria stipulated in sections 269C and 269P(3) of the Act. If the CEO is satisfied that no substitutable goods were produced in Australia on the day the application was lodged, and the goods do not fall under the prohibited list in section 269SJ, the CEO must issue a TCO, as per section 269P(3). This TCO, such as TCO No 0514065, specifies that certain Cold Drawn Tubes are subject to a reduced rate of customs duty, which in this case is 0% instead of the general 5% rate.
The obligations imposed by this Act on the parties involved are primarily on the applicant and the CEO. The applicant must ensure that their application is valid and meets the core criteria specified in the Act. The CEO must process the application, determine whether it meets the criteria, and if so, issue a TCO. Furthermore, the CEO is required to publish a notice in the Gazette, inviting any interested parties to submit their views on the application. If the CEO does not receive any submissions, they must proceed with issuing the TCO. In this instance, the CEO did not receive any submissions in response to the notice for TCO No 0514065.
The legislation also outlines the consequences of breaching its provisions. While the explanatory statement does not specify particular offences or penalties for breach of the Act or the TCO itself, general provisions in the Customs Act 1901 and associated regulations may apply. These could include fines and imprisonment for offences related to customs duty evasion, misdeclaration, or any fraudulent activities associated with the importation of goods. The maximum penalties for such offences can be significant, depending on the severity and intent of the breach. It is essential for parties involved to comply strictly with the Act to avoid any legal repercussions.