EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804996
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.
Sydney Water Corporation applied for a TCO in respect of certain oil and gas line pipe on 28 March 2008.
Instrument
TCO No 0804996 was made on 20 June 2008. It declares that those certain oil and gas line 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. 0804996 is taken to have come into force on 28 March 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 by the Australian Parliament to regulate customs duties and border control, among other things. It establishes a framework under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs to provide relief from customs duties on certain imported goods. The primary objective of the Act is to facilitate legitimate trade while ensuring that customs duties are collected appropriately. The explanatory statement for Tariff Concession Instrument No. 0804996 outlines the process for granting tariff concessions, highlighting that the CEO must determine whether an application meets the core criteria, such as the absence of substitutable goods produced in Australia. This instrument was introduced to address the specific needs of Sydney Water Corporation for oil and gas line pipes, ensuring that no substitutable goods were produced domestically, thereby justifying the tariff concession. The instrument, effective from the date the application was lodged, provides for the goods in question to be subject to a free rate of duty, rather than the general 5% rate.
Scope and Application
The Tariff Concession Instrument No. 0804996, made under Part XVA of the Customs Act 1901, applies to any entity or individual who applies for a Tariff Concession Order (TCO) for specific goods, in this case, certain oil and gas line pipes. The instrument was issued following an application by Sydney Water Corporation on 28 March 2008, and it specifies that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995. The Act mandates that a TCO can only be granted if no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. The TCO, effective from the day the application was made, provides for a zero rate of duty on these goods, whereas the general rate is 5%. The CEO of Customs, upon being satisfied that the application meets the core criteria and no submissions are received against it, is obligated to make the TCO. The instrument does not disadvantage any person other than the Commonwealth nor does it impose any liabilities on any person, though it does allow importers to apply for a refund of duty on goods imported since the TCO's effective date.
Key Provisions
The Tariff Concession Instrument No. 0804996 under the Customs Act 1901 provides a lower rate of customs duty on certain oil and gas line pipes, as per section 269F. The instrument was issued following a successful application by Sydney Water Corporation on 28 March 2008, and it came into effect on the same day, in accordance with subsection 269S(1). This TCO exempts the specified goods from the general customs duty of 5% and instead imposes a duty-free rate, as stated in item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Customs Act 1901 imposes specific obligations on the Chief Executive Officer of Customs (CEO) when processing a Tariff Concession Order (TCO) application. Under section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties who might oppose the TCO. For TCO No. 0804996, no such submissions were received. Additionally, the CEO must ensure that the application meets the core criteria outlined in section 269C, which includes confirming that no substitutable goods were produced in Australia on the application date, as defined by sections 269D and 269E of the Act.
The Act also sets out the consequences for non-compliance with its provisions. While the explanatory statement does not explicitly detail offences or penalties, breaches of the Customs Act 1901 generally result in civil or criminal penalties. Under the Customs Act, penalties can include fines and imprisonment for serious violations. The exact penalties depend on the nature and severity of the breach, with maximum penalties specified in the relevant sections of the Act. For instance, section 134 imposes penalties for false statements or representations, with maximum fines and imprisonment terms outlined therein. The Customs Act 1901, in conjunction with the Customs Regulations 1993, thus ensures that any misuse or circumvention of tariff concession provisions is subject to stringent legal repercussions.