EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0713866
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.
IHI Engineering Australia Pty Ltd applied for a TCO in respect of certain steam generation boiler pipes on 31 August 2007.
Instrument
TCO No 0713866 was made on 09 November 2007. It declares that those certain steam generation boiler 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. 0713866 is taken to have come into force on 31 August 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 Australian Parliament, established a framework for the regulation of customs and excise in Australia. The Act includes provisions for Tariff Concession Orders (TCOs) which allow for reduced customs duties on certain goods, provided specific criteria are met. The primary problem this legislative framework was introduced to address was ensuring that Australian industries could compete fairly on the global market by reducing the cost of imported goods that have no locally produced equivalent. The Tariff Concession Instrument No. 0713866, made in 2007, exemplifies the application of this framework, specifically aimed at facilitating the importation of certain steam generation boiler pipes by IHI Engineering Australia Pty Ltd. The policy objective here is to support Australian industries by reducing their costs, thereby promoting economic efficiency and competitiveness without imposing any new liabilities on individuals or entities.
Scope and Application
The Tariff Concession Instrument No. 0713866 applies to entities seeking tariff concessions on specific goods under the Customs Act 1901. This instrument is relevant to businesses and individuals involved in the importation of certain steam generation boiler pipes. It grants a concession by reducing the customs duty on these goods to zero, provided they meet the criteria outlined in the Act. The application of this instrument is national in scope, aligning with the broader framework established by the Customs Act 1901, which is a Commonwealth Act. The instrument does not extend to goods specified in section 269SJ of the Act, which are ineligible for tariff concessions. The instrument also ensures that no existing rights of importers are adversely affected, and it does not impose new liabilities on any party. The effectiveness of the tariff concession is contingent on the Chief Executive Officer of Customs being satisfied that no substitutable goods are produced in Australia. This provision allows for the instrument to be further defined and extended through subordinate instruments, thereby offering flexibility in its application.
Key Provisions
The main operative sections of this legislation include section 269F, which allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. The application must be considered under section 269C, which stipulates that the application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269E). If the CEO is satisfied that the application meets these criteria, they are required to make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, effectively granting tariff concessions (section 269P(3)). The CEO must also publish a notice in the Gazette inviting any person who considers there are reasons why the TCO should not be made to lodge a submission, as per section 269K(1).
The obligations imposed on parties by this Act include the requirement for applicants to ensure their TCO applications meet the core criteria set out in section 269C. The CEO is obligated to assess applications, make written orders if criteria are met, and publish notices in the Gazette inviting submissions. The CEO must also ensure that the rights of any person other than the Commonwealth are not adversely affected by the TCO. Furthermore, the CEO must take into account any submissions received and decide whether the TCO should be made, as stipulated in section 269K(1).
In terms of offences, penalties, or consequences for breach, the Act does not explicitly state civil or criminal penalties for non-compliance with the TCO provisions. However, any failure to comply with the requirements to apply for a TCO, or any misrepresentation in the application, could potentially lead to legal challenges or administrative actions. The Act ensures that the TCO does not affect the rights of a person as at the date of registration so as to disadvantage that person or impose liabilities on a person in respect of anything done or omitted to be done before the date of registration. Therefore, the primary consequences of non-compliance would likely be administrative in nature, rather than financial penalties.