EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0835296
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.
Zambelli Rainwater Products Pty Ltd applied for a TCO in respect of certain refined copper roofing fittings on 14 October 2008.
Instrument
TCO No 0835296 was made on 14 January 2009. It declares that those certain refined copper roofing 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. 0835296 is taken to have come into force on 14 October 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. 0835296, enacted under the Customs Act 1901, addresses the need for tariff concessions on specific goods by allowing the Chief Executive Officer of Customs to grant lower rates of customs duty through Tariff Concession Orders. Zambelli Rainwater Products Pty Ltd applied for a Tariff Concession Order for certain refined copper roofing fittings, which were granted on 14 January 2009, as no substitutable goods were being produced in Australia. This concession allows for the importation of these fittings duty-free, aligning with the policy objective of encouraging trade and reducing costs for importers of these goods. The Instrument was published in the Gazette with an invitation for submissions, none of which were received, and it came into force on the date of the application, 14 October 2008, without affecting the rights of any person prior to the registration.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which apply a lower rate of customs duty to specified goods. This Act applies to any person or entity that applies for a TCO in respect of goods, provided the application is not in respect of goods specified in section 269SJ, which are ineligible for a TCO. The TCO scheme is applicable nationally, covering all states and territories within Australia, and its application is not restricted by geographic boundaries. The CEO must determine if an application meets the core criteria, particularly if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The instrument extends its application through subordinate instruments, which include the Customs Tariff Act 1995, providing specific duty rates and schedules applicable to the goods subject to a TCO. There are no stated exclusions or exemptions in the TCO itself, but the process includes a publication step in the Gazette to allow public submissions, although in this instance, no submissions were received. The commencement of the TCO aligns with the date the application was lodged, ensuring that any rights of importers are beneficially affected without imposing liabilities on persons other than the Commonwealth.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0835296 under the Customs Act 1901 (sections 269C, 269F, 269P(3), and 269S) establish the framework for the creation and application of Tariff Concession Orders (TCOs). These sections allow for the reduction or exemption of customs duty on certain goods when specific criteria are met. For example, section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO, while section 269C sets out the core criteria that must be satisfied for the application to be approved. Once the CEO is satisfied that the application meets the criteria, section 269P(3) mandates that a TCO be issued.
Under this legislation, the CEO has specific obligations to ensure that the application process for TCOs is handled correctly. When a TCO application is received, the CEO must first determine whether the goods in question are excluded from TCO eligibility under section 269SJ. If the goods are not excluded, the CEO must then verify that no substitutable goods are being produced in Australia as per section 269C. This verification process is crucial to ensure that the TCO does not unfairly benefit domestic production at the expense of imported goods. Additionally, the CEO is required to publish a notice in the Gazette under section 269K(1), inviting submissions from interested parties on the proposed TCO. This transparency step ensures that all stakeholders have an opportunity to voice their concerns or objections.
Failure to comply with the provisions of the Customs Act 1901 can result in significant legal consequences. While the specific penalties for breaches are not outlined in the explanatory statement, the general principles of the Act suggest that non-compliance could lead to civil or criminal penalties. The severity of these penalties would depend on the nature and extent of the breach. For instance, knowingly providing false information in a TCO application could result in fines or even imprisonment, as per the general legal framework governing such activities in Australia.
The commencement date of the TCO, as specified in section 269S, is the day the application was lodged. This means that the concessions granted by TCO No. 0835296 apply retroactively to the date of application, which in this case is 14 October 2008. This retroactive application ensures that importers who brought in the specified refined copper roofing fittings after this date can benefit from the tariff concessions, including the potential to apply for duty refunds under paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any liabilities on any person, ensuring that the rights of importers are protected and that no existing liabilities are retroactively affected.