EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0703305
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.
APC Socotherm Pty Limited applied for a TCO in respect of certain pipe rotators on 02 March 2007.
Instrument
TCO No 0703305 was made on 25 May 2007. It declares that those certain pipe rotators 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. 0703305 is taken to have come into force on 02 March 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 Parliament of Australia, established a framework for the imposition of customs duties and tariffs on imported goods. It introduced Tariff Concession Orders (TCOs) to provide relief by reducing or eliminating customs duties on certain goods, which is crucial for promoting trade, encouraging investment, and ensuring fair competition. The Customs Tariff Concession Instrument No. 0703305 was introduced on 25 May 2007 to address the specific needs of businesses by granting tariff concessions on certain pipe rotators. This was achieved by reducing the duty rate from 5% to free under item 50 of Schedule 4 to the Customs Tariff Act 1995, following an application by APC Socotherm Pty Limited. The policy objective was to support Australian businesses by making essential goods more affordable and competitive, thus fostering economic growth and facilitating industrial development.
Scope and Application
The Tariff Concession Instrument No. 0703305 under the Customs Act 1901 applies specifically to the concession of customs duty on certain pipe rotators. This legislation is applicable to APC Socotherm Pty Limited, the entity that applied for the tariff concession, and to any goods that meet the criteria outlined in the Act. The instrument provides for a free rate of duty on these specific goods, which contrasts with the general rate of 5% typically applied. The Act extends to the Commonwealth jurisdiction and operates under the authority of the Chief Executive Officer of Customs, who has the discretion to approve or deny applications for tariff concessions. This process ensures that only goods for which no substitutable alternatives are produced in Australia are eligible for concession. Additionally, the Act does not impose any liabilities on persons other than the Commonwealth, thereby protecting them from any disadvantage or new obligations arising from the tariff concession, while benefiting importers who can claim refunds for duties paid prior to the concession's effective date.
Key Provisions
The Customs Act 1901 (the Act) establishes a framework for Tariff Concession Orders (TCOs) under section 269F, allowing the Chief Executive Officer of Customs (the CEO) to grant tariff concessions for specific goods. An application for a TCO can be made by any person if the goods in question do not fall under the list specified in section 269SJ of the Act, which details goods that are ineligible for TCOs. A TCO application is considered valid if the CEO determines that no substitutable goods were produced in Australia on the date of application, in accordance with section 269C. This determination hinges on the definitions of ‘goods produced in Australia’, ‘ordinary course of business’ and ‘substitutable goods’, which are further defined in sections 269D, 269E and 269B of the Act respectively.
In the case of APC Socotherm Pty Limited, a TCO (TCO No. 0703305) was issued on 25 May 2007 for certain pipe rotators. This TCO was made after the CEO confirmed that no substitutable goods were produced in Australia for these specific items, thereby satisfying the core criteria under section 269C. The general duty rate for these goods is 5%, but under the TCO, these goods are subject to a duty rate of free, as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995. It is noteworthy that the TCO came into effect on 2 March 2007, the date on which the application was lodged, as per subsection 269S(1) of the Act.
The Act mandates that the CEO publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting any interested parties to lodge submissions if they believe there are reasons why the TCO should not be made. In the case of TCO No. 0703305, no such submissions were received. This TCO does not affect the rights of any person other than the Commonwealth, ensuring that it does not disadvantage any individual or impose liabilities for actions taken before the TCO’s registration. Importers of the goods in question can benefit from this TCO by applying for a refund of duty on goods imported since the date the TCO came into effect, as per paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any liabilities on any person.
Regarding potential breaches or non-compliance, the Act does not explicitly detail specific offences or penalties related to TCOs. However, general provisions within the Customs Act and associated regulations may apply to ensure compliance. For instance, non-compliance with customs regulations can lead to civil or criminal penalties, including fines and imprisonment, depending on the severity and intent of the breach. It is essential for entities and individuals involved to adhere to the requirements set out by the Act and the TCO to avoid any legal repercussions.