EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0703024
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.
Marubeni Itochu Tubulars Oceania Pty Ltd applied for a TCO in respect of certain welded pipes on 26 February 2007.
Instrument
TCO No 0703024 was made on 18 May 2007. It declares that those certain welded 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. 0703024 is taken to have come into force on 26 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 Tariff Concession Instrument No. 0703024, made under the Customs Act 1901, was enacted to provide a concession on customs duty for certain welded pipes, specifically addressing the need for tariff relief for goods that are not produced domestically. This instrument was introduced to ensure that businesses importing these specific pipes would not be subject to a general rate of duty of 5%, instead being eligible for a tariff-free import. This concession was intended to support the competitiveness of businesses that rely on the importation of these goods. The instrument was made by the Chief Executive Officer of Customs following an application from Marubeni Itochu Tubulars Oceania Pty Ltd, and it became effective on the date the application was lodged, 26 February 2007. The policy objective was to facilitate smoother trade operations and reduce costs for importers without adversely affecting existing rights or imposing new liabilities.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the scheme for Tariff Concession Orders (TCOs), which are applicable to goods that are the subject of such orders. This legislative framework enables the Chief Executive Officer of Customs (CEO) to issue TCOs that lower the rate of customs duty on particular goods. An entity or individual may apply to the CEO for a TCO if the goods in question are not specified in section 269SJ of the Act, which lists goods that are ineligible for tariff concessions. The CEO must then assess whether the application meets the core criteria, as outlined in section 269C, which requires that on the date of the application, no substitutable goods were produced in Australia in the ordinary course of business. The definitions of terms such as "goods produced in Australia", "ordinary course of business", and "substitutable goods" are further clarified in sections 269D, 269E, and 269F respectively. If the CEO is satisfied that the application meets these criteria, a TCO is issued under section 269P(3), specifying the applicable item from Schedule 4 to the Customs Tariff Act 1995. The TCO is deemed to have come into force on the date the application was lodged, as stipulated in subsection 269S(1) of the Act. This legislation applies nationally across Australia and its effects extend to benefiting the rights of importers, who may apply for duty refunds for goods imported since the TCO's effective date.
Key Provisions
The Tariff Concession Instrument No. 0703024, under the Customs Act 1901, outlines specific provisions for a Tariff Concession Order (TCO) applicable to certain welded pipes. This legislation, which was made effective from 26 February 2007, establishes that a lower rate of customs duty applies to these goods (section 269F). The CEO of Customs must make this order if certain criteria are met, including that no substitutable goods are produced in Australia (section 269C). In this instance, the CEO was satisfied that the application met the necessary criteria and made the order declaring that the specific welded pipes are subject to a duty-free rate, as outlined in item 50 of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)).
The Act imposes several obligations on the parties involved. Firstly, any person wishing to apply for a TCO must ensure that their application is not for goods specified in section 269SJ, which cannot be subject to a TCO (section 269F). Once an application is accepted, the CEO must publish a notice in the Gazette, inviting any interested parties to lodge a submission if they believe the TCO should not be made (subsection 269K(1)). The CEO did not receive any submissions in response to this invitation. Additionally, the Act ensures that the TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration, nor does it impose any liabilities on any person (section 269S(1)).
In terms of enforcement and penalties, the Customs Act 1901 does not specify any particular offences, penalties, or civil/criminal consequences for breaches directly related to the TCO provisions. However, it is important to note that any breaches of the customs laws in general could result in civil or criminal penalties. For instance, under section 212 of the Customs Act, the maximum penalty for a serious customs offence is a fine of up to 10,000 penalty units or imprisonment for up to 10 years, or both. It is essential for all parties to comply with the terms and conditions set out in the TCO and the broader customs regulations to avoid any potential penalties or legal consequences.