EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0714123
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.
H20hive Holdings Pty Ltd applied for a TCO in respect of certain leadfree pvc pipes on 31 August 2007.
Instrument
TCO No 0714123 was made on 07 December 2007. It declares that those certain leadfree pvc 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. 0714123 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 Tariff Concession Instrument No. 0714123, enacted under the Customs Act 1901, addresses the gap in tariff concessions by facilitating reduced customs duty rates for specific imported goods. This instrument was introduced to provide relief to businesses importing certain leadfree PVC pipes, which previously faced a 5% duty rate. The instrument was developed following an application by H20hive Holdings Pty Ltd, who sought to alleviate the financial burden associated with these imports. The Australian government, through the Chief Executive Officer of Customs, assessed the application and determined that no substitutable goods were produced in Australia at the time of the application, thereby satisfying the core criteria outlined in section 269C of the Act. Consequently, the instrument was enacted to declare the imported pipes as tariff concession eligible, resulting in a free rate of duty for these goods, effective from the date the application was lodged, 31 August 2007.
Scope and Application
The Customs Act 1901, through Part XVA, establishes a framework whereby Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This Act applies to any person who can apply for a TCO for goods under section 269F, provided the goods are not those specified in section 269SJ, which cannot be subject to a TCO. The Act also applies to goods that are not produced in Australia in the ordinary course of business, as outlined in sections 269C and 269D. If the CEO is satisfied that the application meets the core criteria, they must make a written order specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applicable to the goods in question. For example, TCO No 0714123 made on 7 December 2007, declared that certain leadfree PVC pipes are subject to a duty rate of free, down from the general rate of 5%. The instrument's jurisdiction extends nationally, and it does not affect the rights of any person other than the Commonwealth, ensuring no disadvantage or liability is imposed on any person in respect of actions taken before the TCO was registered.
Key Provisions
The primary sections of the Customs Act 1901 (the Act) relevant to this Tariff Concession Order (TCO) include sections 269C, 269F, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO for goods. If the application is not for goods specified in section 269SJ, and if the CEO is satisfied that the application meets the core criteria in section 269C, the CEO must make a written order, a TCO, specifying the goods to which the concession applies (section 269P(3)). Importantly, section 269S dictates that a TCO is considered to come into force on the day the application was lodged.
The Act imposes specific obligations on the CEO and applicants. The CEO must ensure that the application is valid and that it does not pertain to goods listed in section 269SJ. Furthermore, the CEO must assess whether the application meets the core criteria by determining if no substitutable goods are produced in Australia in the ordinary course of business, as outlined in sections 269B and 269C. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)).
Failure to comply with the Act or the terms of the TCO could lead to civil or criminal consequences. Although specific penalties are not mentioned in the explanatory statement, breaches of the Customs Act can generally result in fines and, in severe cases, imprisonment. The Act’s provisions ensure that the rights of parties, other than the Commonwealth, are protected and that no new liabilities are imposed by the TCO.
The explanatory statement indicates that the TCO does not affect the rights of a person as at the date of registration, ensuring that no person is disadvantaged or imposed with new liabilities concerning actions taken before the TCO’s effective date. This protection extends to ensuring that importers can apply for a refund of duty on goods imported since the TCO’s effective date, as per the Regulations under paragraph 126(1)(r).
The Tariff Concession Order (TCO) No. 0714123, made under section 269P(3) of the Customs Act 1901, applies to certain leadfree PVC pipes, providing them with a zero rate of duty instead of the general rate of 5%. This concession was granted because the CEO determined that no substitutable goods were produced in Australia on the day the application was lodged. The TCO came into force on 31 August 2007, the date the application was submitted, and it beneficially affects the rights of importers, allowing them to apply for duty refunds on goods imported since that date.