EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0840474
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.
Austral Wright Metals Pty Ltd applied for a TCO in respect of certain brass tubes or pipes on 20 November 2008.
Instrument
TCO No 0840474 was made on 27 February 2009. It declares that those certain brass tubes or 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. 0840474 is taken to have come into force on 20 November 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 the legislative framework for customs duties and includes provisions for the creation of Tariff Concession Orders (TCOs). The Act aims to provide flexibility in the application of customs duties, particularly in cases where certain goods are not produced domestically. The introduction of TCOs addresses the gap by allowing the Chief Executive Officer of Customs to grant tariff concessions on imported goods under specific conditions, thus encouraging trade and investment by reducing the duty burden on certain items. The policy objective of this legislation is to ensure that the application of customs duties aligns with broader economic policies aimed at fostering competitive markets and supporting domestic industries where applicable. In this context, the explanatory statement clarifies that the Tariff Concession Instrument No. 0840474, which concerns certain brass tubes or pipes, was introduced to provide tariff relief to importers, effectively reducing the duty rate from 5% to free, provided no substitutable goods are produced in Australia.
Scope and Application
The Customs Act 1901, specifically Part XVA, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). This legislation applies to individuals and entities that seek to reduce the rate of customs duty on specific goods by applying for a TCO. The Act applies to goods that are not specified in section 269SJ, which outlines those goods ineligible for a TCO. The application process requires that the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business, as per sections 269C and 269D. Once the CEO is satisfied that the application meets the core criteria, a TCO is issued, granting a lower rate of duty on the specified goods. The scope of this legislation is national, as it is a Commonwealth Act, and it extends to all industries and transactions involving the importation of goods subject to a TCO. The Tariff Concession Instrument No. 0840474, which concerns certain brass tubes or pipes, exemplifies the application of this Act by reducing the duty on these goods from 5% to free. This particular TCO became effective from the date the application was lodged, 20 November 2008, and does not impose any liabilities on individuals or entities, nor does it disadvantage anyone with respect to actions taken prior to its registration.
Key Provisions
The main operative sections of the Customs Act 1901, as relevant to Tariff Concession Orders (TCOs), include sections 269C, 269B, 269D, 269E, 269F, 269P, and 269SJ (paragraphs 1-2). Section 269F allows an application for a TCO to be made to the Chief Executive Officer (CEO) of Customs. The CEO then assesses whether the application meets the core criteria, which involves determining whether substitutable goods are produced in Australia in the ordinary course of business (section 269C). If the application meets these criteria, the CEO is required to make a written order (section 269P(3)). Section 269SJ outlines the goods that cannot be subject to a TCO.
The Customs Act 1901 imposes several obligations and requirements on the parties involved. The CEO must ensure that any TCO application is not in respect of goods specified in section 269SJ. If the application passes this initial check, the CEO must verify that no substitutable goods are produced in Australia in the ordinary course of business (section 269C). If these criteria are satisfied, the CEO must make a TCO, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applicable to the goods in question (section 269P(3)). Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties regarding the TCO application (subsection 269K(1)).
Under the Customs Act 1901, there are no explicit offences, penalties, or civil/criminal consequences stated for breaches of the TCO provisions. However, the Act ensures that the rights of persons other than the Commonwealth are not adversely affected by the TCO as of the registration date, nor are they imposed with any liabilities for actions taken before the registration date (subsection 269S(1)). Instead, the TCO primarily benefits importers by allowing them to apply for a refund of duty on goods imported since the TCO came into force (paragraph 126(1)(r) of the Regulations).
The Tariff Concession Instrument No. 0840474, made on 27 February 2009, applies these provisions to certain brass tubes or pipes. The CEO determined that no substitutable goods were produced in Australia, leading to the issuance of the TCO, which specifies that item 50 of Schedule 4 to the Customs Tariff Act 1995 applies to these goods, resulting in a duty rate of free, as opposed to the general rate of 5% (paragraph 3). This TCO came into effect on 20 November 2008, the date of the application, and no submissions were received in response to the Gazette notice, indicating no objections to the TCO (subsection 269K(1)).