EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803010
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 22 February 2008.
Instrument
TCO No 0803010 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. 0803010 is taken to have come into force on 22 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 Tariff Concession Instrument No. 0803010, enacted under the Customs Act 1901, was introduced to provide a lower rate of customs duty for certain specified goods, addressing the gap where goods that are not produced in Australia may require tariff concessions to support industry and economic competitiveness. This legislation allows the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) when no substitutable goods are produced in Australia, thereby encouraging the importation of these goods by reducing their duty burden. The policy objective is to facilitate the importation of specific goods, ensuring they are accessible and competitively priced in the Australian market. The enactment of this instrument by the CEO, following an application and public consultation, ensures that the rights of importers are protected and that no existing liabilities or disadvantages are imposed on other stakeholders.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCO) scheme, applies to any person or entity wishing to apply for reduced customs duty rates on specific goods. This scheme allows the Chief Executive Officer of Customs to grant tariff concessions provided that the goods in question are not specified in section 269SJ, which lists goods ineligible for TCOs, and that the core criteria set out in section 269C are met. This means that the goods should not have substitutable alternatives produced in Australia in the ordinary course of business. The application process involves the CEO publishing a notice in the Gazette to invite submissions from interested parties, as per section 269K(1). Once the CEO is satisfied that the application meets the necessary criteria, a TCO is made, effective from the date the application was lodged, as per section 269S(1). In this instance, TCO No. 0803010 applies to certain electric resistance welded pipes, granting them a duty-free status effective from 22 February 2008, which benefits importers by allowing them to seek refunds for duties paid on such goods imported since that date. The TCO does not affect pre-existing rights or impose any liabilities on persons other than the Commonwealth.
Key Provisions
The main provisions of the Tariff Concession Instrument No. 0803010, made under section 269F of the Customs Act 1901, relate to the tariff concession for certain electric resistance welded pipes. According to section 269C of the Act, a Tariff Concession Order (TCO) can be made by the Chief Executive Officer of Customs (CEO) if no substitutable goods are produced in Australia on the day the application is lodged. This condition is essential as it determines the eligibility for tariff concessions (s. 269C). If the CEO is satisfied that the application meets the core criteria, a written order, or TCO, is made under section 269P(3) of the Act, declaring that the specified goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, which sets the duty rate (s. 269P(3)).
The obligations under this Act primarily concern the CEO's duty to assess the validity of TCO applications and to make a decision based on the core criteria outlined in the Act. If an application is received, the CEO must publish a notice in the Gazette inviting any interested parties to submit their views on the application (s. 269K(1)). The CEO must also ensure that the application does not involve goods specified in section 269SJ, which are ineligible for TCOs. Moreover, the CEO has to confirm that the goods in question are not substitutable by any goods produced in Australia, as defined under sections 269D and 269E (s. 269C).
Any failure to comply with the requirements set out in the Customs Act 1901 may result in civil or criminal consequences. While the explanatory statement does not explicitly detail the penalties for breaches, under the general provisions of the Act, penalties can include fines and imprisonment. The exact penalties would depend on the specific nature of the breach and could be subject to the maximum penalties outlined in the relevant sections of the Customs Act and any subsidiary legislation. For instance, misleading or fraudulent applications could lead to significant fines or imprisonment terms as prescribed by the Act.