EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0702857
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.
Multec Pty Ltd applied for a TCO in respect of certain aluminium multilayer pipes on 22 February 2007.
Instrument
TCO No 0702857 was made on 18 May 2007. It declares that those certain aluminium multilayer 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. 0702857 is taken to have come into force on 22 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 enacted by the Australian Parliament to regulate the import and export of goods across Australia's borders, among other purposes. The Act facilitates international trade by providing a framework for the imposition and collection of customs duties and other charges. The Tariff Concession Instrument No. 0702857 was introduced to address a specific gap in the customs duty regime concerning the application of tariff concessions to certain imported goods. This instrument, issued under the authority of the Act, allows for the reduction or exemption of customs duty on specified goods, provided they meet certain criteria, such as the absence of substitutable goods produced in Australia.
The instrument was created following an application by Multec Pty Ltd for tariff concessions on certain aluminium multilayer pipes, where it was determined that no substitutable goods were produced in Australia, thus meeting the core criteria outlined in the Customs Act. The instrument was issued by the Chief Executive Officer of Customs and effectively reduced the duty on these pipes from 5% to free, enhancing the competitiveness of these goods in the Australian market. The process was conducted with due consultation, and the instrument came into force on the date of the application, 22 February 2007, without retroactively affecting the rights of any party.
Scope and Application
The Tariff Concession Instrument No. 0702857 under the Customs Act 1901 applies to the particular category of aluminium multilayer pipes specified in the instrument. The Act allows for Tariff Concession Orders (TCOs) to be made by the Chief Executive Officer of Customs (CEO) to provide a lower rate of customs duty on certain goods, provided specific criteria are met. In this instance, Multec Pty Ltd applied for a TCO for their specified aluminium multilayer pipes, and the CEO issued Instrument TCO No. 0702857 on 18 May 2007, declaring that these pipes are subject to a free rate of duty, as no substitutable goods were produced in Australia. This concession is effective from 22 February 2007, the date the application was lodged, and it applies nationally across Australia as per the jurisdictional reach of the Customs Act 1901. The instrument does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person, but it does beneficially affect the rights of importers who can apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of this legislation (F2007L01473) concern the establishment and requirements of Tariff Concession Orders (TCOs) under the Customs Act 1901. Specifically, section 269F (1) allows for the application for a TCO by any person, provided that the goods in question are not specified in section 269SJ of the Act. Section 269C outlines the core criteria that the Chief Executive Officer of Customs (CEO) must satisfy before making a TCO, primarily that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. Section 269P(3) mandates that if the core criteria are met, the CEO must make a written TCO order specifying the applicable item in Schedule 4 to the Customs Tariff Act 1995.
The obligations and requirements imposed by the Act on the parties involved include the responsibility of the CEO to evaluate whether a TCO application meets the core criteria, which involves determining whether substitutable goods were produced in Australia on the date the application was lodged. The Act further requires the CEO to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made, as stipulated in subsection 269K(1). Multec Pty Ltd, as the applicant, must ensure that their application complies with the requirements set out in sections 269C and 269F and provide all necessary information to substantiate their claim. Importers of the goods in question must also be aware of their rights under paragraph 126(1)(r) of the Regulations, which allow them to apply for a refund of duty on goods imported since the TCO is taken to have come into force.
The legislation outlines potential civil or criminal consequences for non-compliance with the Act's requirements. While the Explanatory Statement does not explicitly detail penalties for breaching the Act, general penalties under the Customs Act 1901 could apply. For instance, section 272 provides that any person who contravenes any provision of the Act, or any regulation or order made under the Act, is liable to a penalty. The penalty can be up to $22,200 for an individual or up to $111,000 for a body corporate, depending on the severity of the offence. Additionally, section 273 of the Act stipulates that certain offences are indictable, meaning they can be prosecuted in a higher court, which could lead to more severe penalties if found guilty.