EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802963
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.
Rio Tinto Aluminium Ltd applied for a TCO in respect of certain electric resistance welded pipe on 20 February 2008.
Instrument
TCO No 0802963 was made on 16 July 2008. It declares that those certain electric resistance welded pipe 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. One submission objecting to the TCO application was received from Orrcon Operations Pty Ltd.
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. 0802963 is taken to have come into force on 20 February 2008.
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 was enacted to provide a comprehensive framework for the regulation of customs and excise duties in Australia. It was introduced to address the need for a streamlined process for the administration of customs duties and to facilitate international trade by allowing for tariff concessions under certain conditions. The Act empowers the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply lower rates of customs duty to specified goods, provided certain criteria are met. Enacted by the Parliament of Australia, the policy objective of the Customs Act 1901 is to ensure efficient customs administration while also promoting trade by offering tariff relief where appropriate. This mechanism of tariff concessions is particularly designed to benefit industries by reducing the cost of imported goods that do not have Australian-made alternatives.
Scope and Application
The Tariff Concession Instrument No. 0802963 under the Customs Act 1901 applies to entities or individuals seeking to import certain electric resistance welded pipes into Australia, with the purpose of obtaining a tariff concession order (TCO) from the Chief Executive Officer of Customs. This process is specifically designed for goods that are not produced in Australia and have no substitutable domestic products, thereby ensuring the concession only benefits those importing necessary goods not locally manufactured. The legislation governs the procedure for applying and assessing such concessions, ensuring that the application complies with the statutory criteria and does not cover goods prohibited by section 269SJ of the Act. The instrument's jurisdictional reach is national, as it pertains to the Australian Customs framework and applies across all states and territories. The scope of the TCO extends to the specified goods only and does not affect any pre-existing rights or liabilities of parties other than the Commonwealth. The instrument becomes effective from the date the application is lodged, as stipulated under section 269S(1) of the Act.
Key Provisions
The Customs Act 1901, under Part XVA, establishes the framework for Tariff Concession Orders (TCOs), as outlined in sections 269C, 269B, and 269D. These sections detail the criteria for a TCO application, including the requirement that no substitutable goods are produced in Australia in the ordinary course of business at the time the application is made. Section 269C specifies that a TCO application meets the core criteria if no such goods are produced in Australia on the date the application is lodged. Further, section 269B defines "goods produced in Australia" and "ordinary course of business," while section 269D elaborates on the meaning of "substitutable goods" in the context of a TCO application.
The obligations imposed by the Act on parties involved in TCO applications are primarily on the Chief Executive Officer (CEO) of Customs. Once an application is received and deemed valid, the CEO must, under section 269K, publish a notice in the Gazette inviting submissions from interested parties. This ensures transparency and provides an opportunity for objections to be raised. In the case of TCO No. 0802963, the CEO must make a written order declaring that the specified electric resistance welded pipe are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995, provided the core criteria are met. The CEO must also ensure that the TCO does not disadvantage any person other than the Commonwealth and does not impose liabilities for actions taken before the TCO's effective date.
The Act stipulates consequences for breaches of its provisions related to TCOs. While the explanatory statement does not explicitly mention specific offences or penalties for non-compliance with the TCO requirements, general penalties for breaches of the Customs Act could apply. These may include fines and imprisonment for criminal offences, and pecuniary penalties for civil offences. The exact penalties would depend on the nature and severity of the breach, as well as other relevant provisions of the Customs Act and associated regulations.