EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0514591
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.
Agru Australia Pty Ltd applied for a TCO in respect of certain Pipe Fittings on 14 October 2005.
Instrument
TCO No 0514591 was made on 9 January 2006. 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. 0514591 is taken to have come into force on 14 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 Tariff Concession Instrument No. 0514591, enacted under the Customs Act 1901, addresses the need to provide tariff concessions for specific goods, thereby reducing the customs duty applied to them. The Customs Act 1901 allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can apply lower rates of duty to goods specified in the order. This legislative instrument was introduced to provide tariff concessions to Agru Australia Pty Ltd for certain Pipe Fittings, effectively reducing the duty from the general rate of 5% to 0%. The instrument was created after no objections were received in response to a public notice inviting submissions on the proposed TCO. The policy objective is to facilitate the importation of these goods by lowering the associated duty, thereby benefiting importers and potentially stimulating trade.
Scope and Application
The Customs Act 1901, as amended, provides a framework for the application of tariff concessions on imported goods through the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. Specifically, section 269F of the Act allows for an application to be made for a TCO by any person, provided the goods in question are not specified in section 269SJ, which lists goods ineligible for such concessions. The Act stipulates that a TCO application will be considered if, on the date of application, there are no substitutable goods produced in Australia in the ordinary course of business, as defined by sections 269C, 269D, 269E and 269F. The application process requires the CEO to make a written order if the core criteria are met, declaring the goods subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. The TCO is effective from the date the application was lodged, as per section 269S(1) of the Act, and does not affect the rights of persons other than the Commonwealth in relation to actions taken before the registration date. This legislative instrument applies nationally across Australia and does not impose any liabilities on persons other than the Commonwealth.
Key Provisions
The Customs Act 1901, specifically under Part XVA, outlines the framework for Tariff Concession Orders (TCOs), which can be applied for by any person and are subject to approval by the Chief Executive Officer (CEO) of Customs (sections 269F and 269SJ). When an application is made, the CEO must assess whether it meets the core criteria outlined in section 269C, which includes the condition that no substitutable goods are being produced in Australia in the ordinary course of business (section 269D for 'goods produced in Australia' and section 269E for 'ordinary course of business'). Should the CEO find that the application satisfies these criteria, they are required to issue a written TCO that specifies the particulars of the concession, including the relevant tariff item (subsection 269P(3)). In the case of TCO No. 0514591, this involved certain Pipe Fittings being granted a concession, reducing their duty rate from 5% to 0% (item 50 of Schedule 4 to the Customs Tariff Act 1995).
The obligations under this Act include the requirement for the CEO to publish a notice in the Gazette once a TCO application is deemed valid, inviting any interested parties to submit objections or submissions (subsection 269K(1)). Additionally, the Act mandates that TCOs do not affect the rights of any person other than the Commonwealth, and therefore, they cannot disadvantage or impose liabilities on such persons in relation to actions taken before the TCO's effective date (subsection 269S(1)). Furthermore, the Act provides for the rights of importers to be positively impacted, allowing them to apply for a refund of duties paid on goods imported since the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations).
In the event of a breach of the provisions under this Act, there are potential legal consequences. While the Act does not explicitly state the offences or penalties for non-compliance, it is understood that any actions taken in contravention of the Act could lead to civil or criminal penalties. These could include fines or imprisonment, the specifics of which would be determined by the courts based on the nature and severity of the breach. However, it is pertinent to note that the Act itself does not detail the exact penalties, which would be guided by other relevant legislation and legal principles.