EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0818786
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.
Reliance Worldwide Pty Ltd applied for a TCO in respect of certain copper alloy fittings on 15 July 2008.
Instrument
TCO No 0818786 was made on 10 October 2008. It declares that those certain copper alloy 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. 0818786 is taken to have come into force on 15 July 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 regulate the import and export of goods, including the imposition of customs duties. A significant aspect of this Act is the provision for Tariff Concession Orders (TCOs) under Part XVA, which allows for the reduction or exemption of customs duty on certain goods under specific conditions. This legislative framework was introduced to address the need for tariff concessions to support Australian industries by making imported goods more competitive against locally produced alternatives. The enacting body responsible for this Act is the Australian Parliament. The policy objective behind TCOs is to foster economic growth and efficiency by facilitating the importation of goods that are not produced in Australia or are not produced in sufficient quantities, thereby supporting industries and consumers by providing access to a broader range of products at potentially lower costs.
On 10 October 2008, Tariff Concession Order No. 0818786 was made in response to an application from Reliance Worldwide Pty Ltd concerning certain copper alloy fittings. This order was issued as the Chief Executive Officer of Customs was satisfied that no substitutable goods were produced in Australia, thereby meeting the core criteria outlined in the Customs Act 1901. Consequently, the general rate of duty, which was 5%, was reduced to free for these specific goods, effective from 15 July 2008, the date the application was lodged. No objections were received in response to the public notice published in the Gazette, and the rights of importers were beneficially affected, with the ability to apply for a refund of duty on goods imported since the effective date of the concession.
Scope and Application
The Customs Act 1901, under Part XVA, facilitates the creation of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs (CEO). These orders can reduce the customs duty on specific goods, provided the application meets certain criteria, notably that no substitutable goods are produced in Australia in the ordinary course of business. The application process involves an initial submission to the CEO, followed by a mandatory publication in the Gazette to invite objections, although no objections were received for Tariff Concession Instrument No. 0818786 concerning certain copper alloy fittings. The TCO is deemed to come into effect on the date the application was lodged and does not affect pre-existing rights or impose new liabilities on persons other than the Commonwealth. This legislative framework applies nationally across Australia and extends to any entities or individuals involved in the importation of the specified goods, thereby offering them a reduced duty rate as per the particulars outlined in the Tariff.
Key Provisions
The primary operative sections of the Customs Act 1901, as modified by the Tariff Concession Order (TCO) No. 0818786, include sections 269C, 269F, and 269P. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning specific goods, provided the goods are not listed in section 269SJ, which outlines goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria in section 269C, they must make a written order (a TCO) stating that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (Tariff). In this case, the TCO No. 0818786, made on 10 October 2008, declares that certain copper alloy fittings are subject to item 50 of Schedule 4 to the Tariff, effectively making the rate of duty on these goods free, as opposed to the general rate of 5%.
The obligations and requirements imposed by the Act on parties or entities it governs include the necessity for any person seeking a TCO to ensure their application complies with the stipulations of section 269F and does not involve goods listed in section 269SJ. The CEO has the duty to evaluate the application against the core criteria in section 269C, particularly ensuring that no substitutable goods were produced in Australia at the time the application was lodged. If satisfied, the CEO must publish a notice in the Gazette inviting submissions from any interested parties and make a written order if no valid submissions are received. Additionally, the CEO must ensure the rights of persons are not adversely affected by the TCO concerning actions taken before the order's effective date.
In terms of offences, penalties, or consequences for breach, the Customs Act 1901 does not explicitly outline specific penalties for non-compliance with TCOs. However, general provisions within the Customs Act 1901 and related regulations may apply to breaches of customs laws, including fines and imprisonment for serious or repeated violations. The TCO itself does not impose any liabilities on any person, but any misuse of the concession or fraudulent claims could lead to enforcement actions under the broader customs legislation, which may include significant fines and penalties.