EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0842548
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.
Hydraulink Australia applied for a TCO in respect of certain pipe tube and hose fittings and adaptors on 03 December 2008.
Instrument
TCO No 0842548 was made on 27 February 2009. It declares that those certain pipe tube and hose fittings and adaptors 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. 0842548 is taken to have come into force on 03 December 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. 0842548 was enacted in 2009 under the Customs Act 1901 to address the need for tariff concessions on certain goods not produced in Australia, thereby preventing domestic industries from being unfairly disadvantaged. This instrument was introduced to facilitate applications by businesses seeking lower customs duties on imported goods where no equivalent products are manufactured domestically. The Customs Act 1901 allows the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) if certain criteria are met, including the absence of substitutable goods in Australia. The Tariff Concession Instrument No. 0842548 specifically applies to certain pipe tube and hose fittings and adaptors, granting them a zero percent duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995, reducing the previous general rate of 5 percent. The instrument was effective from the date of the application, 03 December 2008, and did not impose any liabilities on persons other than the Commonwealth.
Scope and Application
The Tariff Concession Order No. 0842548 under the Customs Act 1901 applies specifically to certain pipe tube and hose fittings and adaptors. This concession is applicable to goods that Hydraulink Australia applied for on 03 December 2008. The Act allows for the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCOs) which grant lower rates of customs duty on specified goods. The TCO applies to the goods as from the date the application was lodged, which in this case is 03 December 2008. The order was made on 27 February 2009, following the CEO's satisfaction that no substitutable goods were produced in Australia in the ordinary course of business at the time of the application. The TCO provides a rate of duty of free for the specified goods, whereas the general rate of duty is 5%.
Geographically, the application of this TCO is national, as it falls under the purview of the Commonwealth of Australia as per the Customs Act 1901. The CEO must ensure that the application meets the core criteria, which include the absence of substitutable goods being produced in Australia, as defined by the Act. The Act does not impose any liabilities on persons other than the Commonwealth and does not disadvantage them with respect to actions taken before the registration of the TCO. Importers, however, will benefit from this concession as they may apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The key operative sections of Tariff Concession Instrument No. 0842548 under the Customs Act 1901 (the Act) establish the framework for the Chief Executive Officer of Customs (the CEO) to make Tariff Concession Orders (TCOs). Specifically, section 269F allows a person to apply to the CEO for a TCO in respect of goods, provided the goods are not specified in section 269SJ of the Act. Section 269C stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets these criteria, they must make a written order (TCO) declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, with a specified rate of duty (subsection 269P(3)). For instance, in TCO No. 0842548, certain pipe tube and hose fittings and adaptors were declared subject to item 50 of Schedule 4, resulting in a duty rate of free instead of the general rate of 5%.
The Act imposes several obligations on the parties involved. The CEO must ensure that a TCO application meets the core criteria as outlined in sections 269C, 269B, and 269D. Once an application is accepted as valid, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). In this case, no submissions were received. Additionally, the TCO is deemed to have come into force on the day the application was lodged (subsection 269S(1)), meaning that TCO No. 0842548 took effect on 3 December 2008. This TCO does not disadvantage any person other than the Commonwealth or impose liabilities on any person for actions taken before the registration date.
In terms of potential offences, penalties, or consequences for breach, the Act does not explicitly state any criminal penalties for failing to comply with the provisions of a TCO. However, any party that contravenes the terms of the TCO or any related regulations could face civil consequences, such as financial penalties or being required to pay the applicable customs duty retroactively. The maximum penalties for breaches of customs regulations are set out in the Customs Act 1901 and the Customs Regulations 1993. For example, under section 126 of the Act, an importer who fails to comply with the customs provisions could be liable to a fine of up to 10,000 penalty units or imprisonment for up to five years, or both, for each offence. These provisions ensure that the legal framework is robust and that compliance is strictly enforced to maintain the integrity of the customs duty system.