EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0828344
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 Pty Ltd applied for a TCO in respect of certain sumerged arc welded pipe on 27 August 2008.
Instrument
TCO No 0828344 was made on 09 February 2009. It declares that those certain sumerged arc 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. 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. 0828344 is taken to have come into force on 27 August 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 for the regulation of customs and excise, including the collection of duties and taxes on imported goods. The legislation was introduced to address the need for a structured framework to govern the importation of goods into Australia, ensuring that customs duties are appropriately levied and managed. Part XVA of the Customs Act 1901 establishes a scheme for Tariff Concession Orders (TCOs), allowing the Chief Executive Officer of Customs to grant tariff concessions on certain goods. This scheme was designed to support Australian industries by reducing the customs duty on specific goods, thereby making them more competitive. The policy objective behind TCOs is to provide relief where no substitutable goods are produced in Australia, thus encouraging the importation of necessary goods without imposing additional burdens on Australian businesses or consumers.
Scope and Application
The Tariff Concession Instrument No. 0828344, made under the Customs Act 1901, applies to the specific goods known as submerged arc welded pipes, as requested by Rio Tinto Aluminium Pty Ltd. The act allows the Chief Executive Officer of Customs to grant tariff concessions if certain conditions are met, such as the absence of substitutable goods produced in Australia. This instrument, effective from 27 August 2008, provides a lower rate of customs duty for these goods, effectively reducing the general duty rate from 5% to free. The instrument's jurisdictional reach is federal, as it is governed under the Commonwealth of Australia. The instrument does not impose any new liabilities or affect the rights of any person adversely with respect to actions taken prior to its registration. However, it does provide benefits to importers who may apply for duty refunds for goods imported since the instrument's effective date. The instrument extends its application without exclusions or exemptions, unless otherwise specified in subordinate instruments.
Key Provisions
The Customs Act 1901 provides for the establishment of Tariff Concession Orders (TCOs) under section 269F, which can be applied for by any person seeking to reduce the customs duty on certain goods. A TCO can be made by the Chief Executive Officer of Customs (CEO) if it is determined that the goods in question are not specified in section 269SJ, and if the application meets the core criteria outlined in section 269C. This requires that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Substitutable goods are defined in section 269D, ordinary course of business in section 269E, and the criteria for meeting core requirements are detailed in section 269P. If these conditions are met, the CEO must issue a TCO that specifies the lower rate of duty applicable to the goods.
The obligations under this Act for the parties involved include the duty of the CEO to consider applications for TCOs and to ensure they meet the specified criteria. The applicant must provide sufficient evidence that the goods in question do not have substitutable goods produced in Australia. The CEO is also required to publish a notice in the Gazette inviting any interested parties to submit objections or comments regarding the application. This process ensures transparency and allows for public scrutiny of the TCO process. Once a TCO is issued, it applies from the date the application was lodged, as per section 269S(1), and does not affect any existing rights or liabilities as per subsection 269S(2).
Failing to comply with the requirements of the Customs Act 1901 and the associated regulations can lead to both civil and criminal consequences. Civil penalties can include fines, which are specified in the relevant sections of the Act and associated regulations. For example, providing false or misleading information in an application for a TCO can result in a penalty of up to 5,000 penalty units under section 283-126 of the Crimes Act 1914. Criminal penalties may also apply for more serious breaches, such as knowingly providing false information, which can lead to imprisonment. The exact penalties are determined by the severity of the breach and are set out in the applicable legislation.