EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0706855
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.
Gilbarco Australia Limited applied for a TCO in respect of certain pipes on 09 May 2007.
Instrument
TCO No 0706855 was made on 20 July 2007. It declares that those certain 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. 0706855 is taken to have come into force on 09 May 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. 0706855, enacted in 2007 under the Customs Act 1901, was introduced to address the need for tariff concessions for certain imported goods that are not produced domestically. This legislative instrument allows for the reduction of customs duty on specific goods by the Chief Executive Officer of Customs, provided that no substitutable goods are produced in Australia. The instrument was developed in response to an application by Gilbarco Australia Limited for tariff concessions on certain pipes, which were granted after it was determined that no domestic equivalents were being produced. This measure benefits importers by potentially allowing them to claim refunds on duties paid on these goods since the effective date of the tariff concession.
The enacting body for this instrument is the Chief Executive Officer of Customs, who is mandated under section 269F of the Customs Act 1901 to decide on tariff concession applications. The policy objective behind this legislation is to facilitate the importation of goods that are not domestically produced, thereby promoting competition and potentially lowering costs for consumers and businesses that rely on these imports. The instrument came into force on the date the application was lodged, 09 May 2007, and does not affect any existing rights or impose liabilities on persons other than the Commonwealth.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This mechanism allows for reduced customs duty rates on certain goods, contingent on meeting specific criteria outlined in the Act. An application for a TCO can be submitted by any person, provided the goods in question are not excluded under section 269SJ and meet the core criteria set out in section 269C. These criteria ensure that the goods are not substitutable by any goods produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. Once the CEO determines that an application meets these criteria, a TCO is issued, granting a lower customs duty rate as specified in the Customs Tariff Act 1995. This process ensures that the concession applies only to goods that cannot be domestically produced as alternatives, thereby promoting certain industries by reducing import costs. The TCO does not retroactively affect the rights or liabilities of any person other than the Commonwealth, ensuring that the legislative change operates prospectively from the date of application lodgement.
Key Provisions
The primary operative sections of the Customs Act 1901 relevant to the Tariff Concession Instrument No. 0706855 (paragraphs 269B, 269C, 269D, 269E, 269F, 269K, 269P, and 269S) establish the framework for the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Under section 269F, a person may apply for a TCO for certain goods. If the CEO determines that the application meets the core criteria, such as the absence of substitutable goods produced in Australia (section 269C), a TCO is issued, resulting in a reduced rate of customs duty for the specified goods (section 269P(3)). The TCO in question, No. 0706855, was issued on 20 July 2007, and it grants a free rate of duty on certain pipes, as opposed to the general rate of 5%.
The Customs Act 1901 imposes certain obligations on the CEO and applicants. The CEO must ensure that applications for TCOs meet the core criteria (section 269C) and, if satisfied, must issue a written order (section 269P(3)). Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any person who may have reasons for opposing the TCO (section 269K(1)). The applicant, on the other hand, must provide all necessary information to demonstrate that the goods meet the criteria for a TCO. In this case, Gilbarco Australia Limited applied for a TCO for certain pipes on 09 May 2007, and the CEO was satisfied that no substitutable goods were produced in Australia.
The Customs Act 1901 also specifies consequences for non-compliance or breaches of the Act. While the explanatory statement does not detail specific offences or penalties related to TCO applications, the Act generally provides for both civil and criminal penalties for breaches of customs laws. Civil penalties can include fines up to $11,000 per offence, while criminal penalties can result in fines of up to $220,000 for individuals and $1,100,000 for corporations, along with potential imprisonment. These penalties apply to any breach of the Act, including improper applications for TCOs or fraudulent claims of tariff concessions.