EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701302
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.
DBNGP (WA) Nominees Pty Ltd applied for a TCO in respect of certain steel pipes on 24 January 2007.
Instrument
TCO No 0701302 was made on 13 April 2007. It declares that those certain steel 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. 0701302 is taken to have come into force on 24 January 2007.
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, provides the legislative framework for managing and regulating the import and export of goods across Australia's borders. The Act, through its various sections, including Part XVA, facilitates the application and administration of tariff concession orders (TCOs) by the Chief Executive Officer of Customs (CEO). This mechanism enables the application of a lower rate of customs duty on specified goods, provided certain criteria are met. Tariff Concession Instrument No. 0701302, introduced to address the need for tariff relief on particular goods where no substitutable Australian-produced alternatives exist, exemplifies this process. The instrument was made on 13 April 2007, following an application by DBNGP (WA) Nominees Pty Ltd for tariff concessions on certain steel pipes. The policy objective is to support Australian businesses by reducing the duty on imported goods, thereby making them more competitive and accessible in the domestic market without imposing additional liabilities or disadvantaging any party.
Scope and Application
The Customs Act 1901, through the Tariff Concession Instrument No. 0701302, provides a framework under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. These orders are designed to apply a lower rate of customs duty to specific goods, provided certain criteria are met. The Act applies to entities or individuals who are in the process of importing goods into Australia, particularly those who have applied for a TCO under section 269F. The scope of the legislation extends to industries and transactions involving the importation of goods that could potentially benefit from tariff concessions, particularly where such goods are not produced in Australia in the ordinary course of business. The instrument's jurisdictional reach is national, governed by the Commonwealth, and it applies to all states and territories within Australia. There are specific exclusions outlined in section 269SJ of the Act, which detail the types of goods that cannot be subject to a TCO. The application of the Act can be extended or restricted through subordinate instruments, which provide additional definitions and operational details necessary for the implementation of TCOs.
Key Provisions
The main operative sections of this legislation (F2007L01041) revolve around the creation and implementation of Tariff Concession Orders (TCOs) under the Customs Act 1901 (section 269F). Specifically, section 269C stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B elaborates on the definitions of key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods'. If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these core criteria, they must make a written order, or TCO, declaring that the goods in question are subject to a prescribed rate of duty (section 269P(3)). In this specific case, Tariff Concession Order No. 0701302 declares that certain steel pipes are subject to a zero rate of duty instead of the general rate of 5%.
The obligations and requirements imposed by this legislation primarily concern the CEO of Customs. When a valid application for a TCO is received, the CEO must publish a notice in the Gazette inviting any person who considers that the TCO should not be made to lodge a submission (subsection 269K(1)). In this instance, the CEO did not receive any submissions. Furthermore, a TCO is taken to have come into force on the day on which the application for the TCO was lodged (subsection 269S(1)). This means that for TCO No. 0701302, the effective date is 24 January 2007. It is also important to note that the TCO does not affect the rights of any person, other than the Commonwealth, in a manner that would disadvantage them or impose liabilities for actions taken prior to the registration date.
In terms of potential breaches and consequences, the Customs Act 1901 does not explicitly outline offences, penalties, or specific civil or criminal consequences for failing to comply with the provisions of a TCO. However, it is reasonable to infer that any fraudulent application for a TCO, or misuse of a TCO, could lead to legal action under general fraud or customs-related offences. The penalties for such offences could vary significantly depending on the specific circumstances and the relevant provisions of other applicable laws, but could potentially include fines and imprisonment.