EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701748
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.
Kingston Bridge Engineering Pty Ltd applied for a TCO in respect of certain high density polyethylene pipe cutters on 02 February 2007.
Instrument
TCO No 0701748 was made on 30 April 2007. It declares that those certain high density polyethylene pipe cutters 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. 0701748 is taken to have come into force on 02 February 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 amended to introduce the scheme for Tariff Concession Orders (TCOs) to provide relief to importers by allowing for reduced rates of customs duty on specific goods. Enacted by the Australian Parliament, this legislative change aims to facilitate the importation of goods that are not produced domestically, thereby encouraging trade and potentially lowering costs for consumers. The Tariff Concession Instrument No. 0701748, introduced in 2007, exemplifies the application of this scheme. This particular instrument, concerning high-density polyethylene pipe cutters, was enacted to ensure that these goods, which have no Australian-made substitutes, are subject to a zero rate of duty, thereby reducing the financial burden on importers and potentially benefiting end-users. The policy objective is to support the importation of non-domestically produced goods, ensuring that Australian consumers and businesses have access to a broader range of products at potentially lower costs.
Scope and Application
The Tariff Concession Instrument No. 0701748, made under the Customs Act 1901, applies to entities or individuals seeking tariff concessions on certain goods for importation into Australia. Specifically, this Instrument concerns the application made by Kingston Bridge Engineering Pty Ltd for tariff concessions on high density polyethylene pipe cutters, which were declared to be free of customs duty under the Instrument. The Act applies to these particular goods and the application process, allowing the Chief Executive Officer of Customs to grant a Tariff Concession Order (TCO) if certain criteria are met. The TCO comes into effect on the date the application is lodged, which in this case is 02 February 2007. The geographic reach of this legislation is national, as it pertains to customs duties and concessions within Australia. Notably, the Act excludes certain goods from being subject to a TCO, as specified in section 269SJ. The CEO is mandated to publish a notice in the Gazette inviting submissions if there are concerns about the TCO, though no such submissions were received for this Instrument. The TCO does not affect the rights of persons other than the Commonwealth and does not impose liabilities on any person.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0701748 pertain to the application and approval process for Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows for applications to the Chief Executive Officer of Customs (CEO) for a TCO on certain goods. Provided the goods are not specified in section 269SJ, which outlines goods ineligible for TCOs, the CEO must assess if the application meets the core criteria set out in section 269C. This entails determining if, at the time of the application, no substitutable goods were being produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. If the CEO is satisfied, they must make a written TCO order, as per subsection 269P(3), specifying the applicable tariff item from Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by this Act on the parties or entities it governs primarily concern the application process for TCOs. The applicant, such as Kingston Bridge Engineering Pty Ltd, must ensure their application meets the eligibility criteria, including the absence of substitutable goods produced in Australia. The CEO is obligated to publish a notice in the Gazette inviting submissions from interested parties, although in this case, no submissions were received. Furthermore, the CEO must rigorously evaluate the application against the core criteria and, if satisfied, issue a formal TCO order. Importers of the affected goods also have obligations, such as applying for duty refunds on goods imported since the TCO's effective date, as per paragraph 126(1)(r) of the Regulations.
In terms of consequences for breach, the Act does not explicitly detail specific offences or penalties related to the TCO application process or the implementation of the TCO itself. However, non-compliance with customs regulations generally can lead to significant civil and criminal penalties under other sections of the Customs Act 1901. For example, knowingly making a false statement in a customs document can result in penalties of up to 10,000 penalty units or imprisonment for up to 10 years, or both, under section 234. Similarly, the importation of goods contrary to the provisions of the Act can attract fines and imprisonment. The precise penalties depend on the nature and severity of the breach, as outlined in the broader customs legislation.