EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0608336
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.
Termguard Pty Ltd applied for a TCO in respect of certain unplasticised PVC piping and/or tubing fittings on 15 May 2006.
Instrument
TCO No 0608336 was made on 28 July 2006. It declares that those certain unplasticised PVC piping and/or tubing 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 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. 0608336 is taken to have come into force on 15 May 2006.
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 Commonwealth Parliament, establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These TCOs provide for a lower rate of customs duty on certain goods. Specifically, the Act addresses the gap by allowing for tariff concessions where no substitutable goods are produced in Australia, thus promoting trade and economic efficiency. The objective of the Act, as demonstrated in the creation of TCO No. 0608336 for certain unplasticised PVC piping and/or tubing fittings, is to ensure that Australian consumers and businesses are not unduly burdened by customs duties on goods that can be more efficiently sourced from overseas. This particular TCO, issued on 28 July 2006, effectively reduced the duty on specified PVC fittings from 5% to free, aligning with the policy objective of facilitating smoother trade flows and potentially lowering costs for importers.
Scope and Application
The Tariff Concession Instrument No. 0608336 applies to unplasticised PVC piping and/or tubing fittings and is enacted under the Customs Act 1901, specifically Part XVA, which facilitates the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This particular TCO was made on 28 July 2006, applying to goods for which Tariff Concession Orders can be made, provided they meet the core criteria outlined in section 269C of the Act. This means that the TCO applies to the specific category of unplasticised PVC piping and/or tubing fittings where no substitutable goods are produced in Australia. The geographic reach of this Act is national, impacting all importers and relevant entities across Australia. The TCO does not affect the rights of any person other than the Commonwealth and does not impose liabilities on anyone, ensuring that the rights of importers are beneficially affected, as they can apply for a refund of duty on goods imported since the TCO is taken to have come into force. The TCO applies from the date the application was lodged, which in this case is 15 May 2006, and does not extend or restrict application through subordinate instruments.
Key Provisions
The Customs Act 1901, under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (s 269F). An application for a TCO can be made by any person, and if the CEO determines that the goods specified in the application are not listed in section 269SJ (which outlines goods that are ineligible for a TCO), the CEO will assess whether the application meets the core criteria (s 269C). To meet these criteria, no substitutable goods, as defined in section 269D, must be produced in Australia in the ordinary course of business on the date the application is lodged (s 269C, s 269E). If the CEO is satisfied that these conditions are met, a written TCO will be issued, specifying that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995 (s 269P(3)).
The obligations imposed by the Act on the CEO include accepting a valid TCO application, publishing a notice in the Gazette inviting submissions from any interested parties, and making a decision on whether the application meets the core criteria (s 269K(1), s 269P(3)). In this case, Termguard Pty Ltd applied for a TCO concerning certain unplasticised PVC piping and/or tubing fittings on 15 May 2006, and the CEO issued TCO No 0608336 on 28 July 2006, which declared that these goods are subject to item 50 of Schedule 4 of the Tariff, resulting in a duty rate of free instead of the general rate of 5% (s 269P(3)).
There are no specific offences or penalties outlined in the explanatory statement for breaching the provisions of this TCO. However, general provisions within the Customs Act 1901 and associated regulations may apply for non-compliance with customs-related obligations, including potential civil and criminal penalties for false statements or fraudulent activities. The maximum penalties for such offences can range from fines to imprisonment, depending on the severity of the breach.
In summary, the main provisions of this legislation involve the application process for TCOs, the CEO's role in assessing applications and making orders, and the publication of notices and invitations for submissions. The TCO in question benefits importers by allowing them to apply for a refund of duty on goods imported since the TCO came into force on 15 May 2006, without imposing any liabilities on any person.