EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0616500
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.
Protube Asia Pty Ltd applied for a TCO in respect of certain aluminium alloy tubing on 01 September 2006.
Instrument
TCO No 0616500 was made on 24 November 2006. It declares that those certain aluminium alloy tubing areis a 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. 0616500 is taken to have come into force on 01 September 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 Australian Parliament, was designed to facilitate trade by regulating the importation and exportation of goods through a system of tariffs and other customs controls. The introduction of Tariff Concession Orders (TCOs) under Part XVA of the Act aimed to address specific trade needs by providing concessions on customs duties for certain goods, thereby encouraging trade and economic activity. The 2006 Explanatory Statement for Tariff Concession Instrument No. 0616500 illustrates the application of this mechanism, where Protube Asia Pty Ltd successfully applied for a TCO for certain aluminium alloy tubing, leading to a reduction in the customs duty rate from 5% to free, provided no substitutable goods were produced in Australia. The legislative process ensured transparency and fairness, as evidenced by the publication of the application in the Gazette, inviting public submissions which, in this case, were not received. This instrument underscores the policy objective of the Customs Act to balance trade facilitation with the protection of domestic industries where necessary.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to persons or entities seeking to import goods into Australia and potentially benefits importers by reducing the customs duty on specified goods. The Act's jurisdiction is Commonwealth-wide, meaning it applies across Australia. The TCO process is initiated by an application to the CEO, who must determine if the application meets the core criteria set out in the Act, particularly ensuring that no substitutable goods are produced in Australia. The TCO process involves detailed criteria concerning the production and use of goods, with specific exclusions listed in section 269SJ. Once a TCO is issued, it applies from the date the application was lodged, and it does not disadvantage existing rights or impose liabilities for actions taken before its issuance. Subordinate instruments may further extend or refine the application of the Act, but the primary legislative text provides the foundational rules and criteria for TCOs.
Key Provisions
The Customs Act 1901 provides a framework under which the Chief Executive Officer of Customs (CEO) may issue Tariff Concession Orders (TCOs) to lower the rate of customs duty on certain goods (s 269F). For a TCO to be granted, a person must apply to the CEO, and the CEO must be satisfied that the goods in question are not those prohibited by section 269SJ of the Act and that they meet the core criteria set out in section 269C. The core criteria, as detailed in section 269C, require that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Substitutable goods are defined in section 269D as goods produced in Australia that can be used in the same way as the goods in question, and 'ordinary course of business' is defined in section 269E.
The obligations imposed by the Customs Act 1901 on the parties it governs are primarily on the CEO. The CEO must assess whether a TCO application meets the core criteria and, if so, issue a written order (TCO) specifying the goods to which the concession applies (s 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting submissions on the application as soon as practicable after accepting it as a valid application (s 269K(1)). In the case of TCO No. 0616500, the CEO received no submissions in response to the published notice.
In terms of penalties and consequences for breaches, the Customs Act 1901 does not explicitly state penalties for failing to comply with the provisions related to TCOs. However, any breaches of the Act, including non-compliance with the conditions of a TCO, could potentially lead to enforcement actions by the Australian Border Force, which may include fines, seizure of goods, or other administrative penalties. The severity of these penalties would depend on the nature and extent of the breach, as well as any relevant statutory provisions and case law. It is important for parties subject to the Act to ensure compliance with its requirements to avoid any adverse consequences.