EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804852
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.
Heath Pipeline Services Pty Ltd applied for a TCO in respect of certain hot tap and linestop fittings on 21 April 2008.
Instrument
TCO No 0804852 was made on 11 July 2008. It declares that those certain hot tap and linestop fittings 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. 0804852 is taken to have come into force on 21 April 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, enacted by the Australian Parliament, establishes a framework for the imposition of customs duty on imported goods. Specifically, Part XVA of the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This mechanism aims to provide relief by applying a lower rate of customs duty on certain goods, contingent on the absence of substitutable goods produced in Australia. Heath Pipeline Services Pty Ltd's application for a TCO concerning certain hot tap and linestop fittings led to Instrument TCO No. 0804852, which was issued on 11 July 2008. This instrument, effective from 21 April 2008, sets the duty rate for these specific fittings at zero, down from the general rate of 5%. This concession is intended to benefit importers by potentially allowing them to claim refunds for duties paid on these goods prior to the TCO's effective date, without adversely affecting any pre-existing rights or imposing new liabilities.
Scope and Application
The Tariff Concession Instrument No. 0804852 under the Customs Act 1901 applies to goods specified in the instrument, namely certain hot tap and linestop fittings. This legislation allows for tariff concessions, reducing the customs duty on these goods from the general rate of 5% to free. The application of the Act is federal, operating under the Commonwealth jurisdiction, thereby affecting customs duties across Australia. The instrument is applicable to any person or entity importing the specified goods and is effective from the date the application was lodged, 21 April 2008. Notably, the Act does not apply to goods that cannot be subject to a Tariff Concession Order as outlined in section 269SJ of the Customs Act 1901, which includes goods that are or can be produced in Australia in the ordinary course of business. The application process requires an assessment by the Chief Executive Officer of Customs, ensuring that no substitutable goods are produced domestically before a concession is granted. The legislation extends its reach through subordinate instruments, facilitating the administration and enforcement of tariff concessions on specific goods.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0804852 under the Customs Act 1901 (section 269P(3)) declare that certain hot tap and linestop fittings are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, thereby exempting them from the general rate of customs duty. This concession was granted because the Chief Executive Officer of Customs (CEO) was satisfied that no substitutable goods were produced in Australia at the time of the application (section 269C). Consequently, these specific fittings now attract a duty rate of free, as opposed to the general 5% rate (section 269P(3)).
The obligations imposed by this legislation primarily concern the CEO of Customs. Upon receiving an application for a Tariff Concession Order (TCO), the CEO must determine whether the application meets the core criteria (section 269C). If satisfied that no substitutable goods were produced in Australia, the CEO is mandated to make a written TCO (section 269P(3)). Furthermore, the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made (subsection 269K(1)). In this instance, no submissions were received, and the TCO was made effective on 21 April 2008, the date the application was lodged (subsection 269S(1)).
There are no specific offences, penalties, or consequences for breach outlined in the explanatory statement or the primary sections referenced. However, the general framework under which these TCOs operate suggests that failure to comply with the terms of the TCO or the process for applying for such a concession could potentially lead to legal consequences. For instance, any misrepresentation or fraudulent application could result in penalties under the Customs Act 1901 or related legislation. Nevertheless, the explanatory statement does not detail specific penalties for non-compliance with this particular TCO.
It is important to note that the TCO does not retroactively affect any rights or impose liabilities on persons other than the Commonwealth (subsection 269S(2)). Importers, however, stand to benefit as they can apply for a refund of duty on goods imported since the TCO came into force (paragraph 126(1)(r) of the Regulations). The rights of all other parties remain unaffected, ensuring that the TCO serves its intended purpose without imposing additional burdens or liabilities.