EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701552
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.
Sumikin Bussan Oceania Pty Ltd applied for a TCO in respect of certain nickel coated welded tubes on 29 January 2007.
Instrument
TCO No 0701552 was made on 20 April 2007. It declares that those certain nickel coated welded 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 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. 0701552
is taken to have come into force on 29 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 was enacted to facilitate and regulate the import and export of goods, including the imposition and collection of customs duty. A significant aspect of this Act is the scheme established under Part XVA, which allows for the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This scheme was introduced to address the need for reduced customs duties on specific goods, thereby supporting economic activities by making certain goods more affordable. The Tariff Concession Instrument No. 0701552, enacted in 2007, is an example of this scheme in action, where a TCO was issued to Sumikin Bussan Oceania Pty Ltd for certain nickel coated welded tubes, reducing their customs duty from 5% to free. The policy objective is to ensure that the application of TCOs aligns with the core criteria, primarily focusing on the non-availability of substitutable goods produced in Australia.
Scope and Application
The Tariff Concession Instrument No. 0701552 under the Customs Act 1901 applies to specific goods, namely certain nickel coated welded tubes, as determined by the Chief Executive Officer of Customs (CEO). The Act facilitates the application process for tariff concessions, enabling the CEO to grant a Tariff Concession Order (TCO) if certain criteria are met, particularly if no substitutable goods are produced in Australia in the ordinary course of business. The TCO applies to the applicant, Sumikin Bussan Oceania Pty Ltd, and any other entities importing the specified goods. The geographic reach of this Act is national, as it pertains to the Commonwealth of Australia and its customs regulations. The Act does not impose any new liabilities on individuals or entities but rather adjusts the customs duty rates for the specified goods, benefiting importers by potentially reducing their duty costs. The TCO in question came into force on the date the application was lodged, 29 January 2007, and does not retroactively affect any rights or impose liabilities for actions taken prior to its registration. The CEO did not receive any objections to the TCO during the consultation period, thus proceeding with the order as specified.
Key Provisions
The main operative sections of this legislation are sections 269C, 269F, and 269P of the Customs Act 1901 (the Act), along with the relevant provisions in Schedule 4 to the Customs Tariff Act 1995. Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of goods. Section 269C sets out the core criteria that must be met for a TCO to be granted, which primarily involves ensuring that no substitutable goods are produced in Australia on the day the application was lodged. Section 269P mandates that if the CEO is satisfied that the application meets the core criteria, a written TCO must be made, declaring that the specified goods are subject to a prescribed rate of duty.
The obligations imposed by the Act on the parties involved are primarily on the applicant and the CEO. The applicant must ensure that their TCO application is valid and meets the core criteria as outlined in section 269C of the Act. This involves demonstrating that no substitutable goods were produced in Australia on the day the application was lodged. The CEO, on the other hand, is obligated to assess the application against the core criteria and, if satisfied, to make a TCO. The CEO must also publish a notice in the Gazette inviting submissions from any person who may have objections to the TCO being made. In this case, no submissions were received.
Section 269K(1) of the Act further stipulates that the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid. This notice must include an invitation for any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO. In the context of TCO No. 0701552, the CEO did not receive any submissions in response to the published notice, facilitating the granting of the concession. Under section 269S(1) of the Act, the TCO is taken to have come into force on the day the application was lodged, which in this instance is 29 January 2007. The TCO does not affect the rights of any person other than the Commonwealth, ensuring that no one is disadvantaged or imposed with liabilities for actions taken before the TCO was registered.
In terms of potential breaches and penalties, section 269R of the Customs Act 1901 provides that it is an offence for a person to provide false or misleading information in an application for a TCO. The maximum penalty for this offence is 10,000 penalty units or imprisonment for five years, or both. Additionally, section 126 of the Customs Regulations 1993 stipulates that if a person imports goods under a TCO and subsequently it is found that the TCO was improperly granted or the goods do not meet the criteria for concession, the person may be liable for any unpaid duty, penalties, and interest. The severity of the penalties depends on the extent of the contravention and the value of the goods involved.