EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0844063
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.
Marubeni Itochu Tubulars Oceania applied for a TCO in respect of certain electric resistance welded tubing on 16 December 2008.
Instrument
TCO No 0844063 was made on 06 March 2009. It declares that those certain electric resistance welded tubing 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. 0844063 is taken to have come into force on 16 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 Customs Act 1901 was enacted to facilitate and regulate the customs duties and tariffs for goods entering Australia. The Tariff Concession Instrument No. 0844063, issued in 2009, is part of this legislative framework, addressing the need for tariff concessions on specific goods to support industries that may otherwise face undue burdens from high customs duties. This instrument was introduced in response to an application by Marubeni Itochu Tubulars Oceania for tariff concessions on certain electric resistance welded tubing, a process that involves evaluating whether substitutable goods are produced in Australia. The instrument was made by the Chief Executive Officer of Customs, in accordance with the Act, after confirming that no such substitutable goods were produced domestically, thus satisfying the core criteria for tariff concessions. This instrument aims to ensure that Australian importers of these specific goods are not disadvantaged by high customs duties, aligning with the policy objective of fostering fair and competitive trade practices.
Scope and Application
The Customs Act 1901, as amended, establishes a framework within which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs. These orders apply to specific goods, granting them a lower rate of customs duty. An entity or individual can apply for a TCO under section 269F of the Act if the goods in question are not specified in section 269SJ, which outlines goods that cannot be subject to a TCO. The application must meet the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The CEO determines if the application is valid and, if satisfied, issues a written order declaring the goods to which the TCO applies. The TCO in question, Instrument TCO No 0844063, was made in respect of certain electric resistance welded tubing, reducing the duty rate from 5% to free. The TCO came into force on the date the application was lodged, 16 December 2008, and benefits importers by allowing them to apply for a refund of duty on goods imported since that date, without imposing any new liabilities.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0844063 include sections 269C, 269F, and 269P(3) of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) concerning certain goods. If the CEO is satisfied that the application meets the core criteria outlined in section 269C, which includes the condition that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, the CEO must make a TCO. This TCO will then specify that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, thus applying a lower rate of customs duty.
The Act imposes several obligations on the parties involved. The applicant must submit a valid application for a TCO, ensuring that it does not pertain to goods specified in section 269SJ of the Act. The CEO must review the application to determine if it meets the core criteria, which includes verifying that no substitutable goods were produced in Australia in the ordinary course of business on the date of application. If the CEO determines that the application meets these criteria, they are required to publish a notice in the Gazette inviting any person who might oppose the TCO to lodge a submission. If no submissions are received, the CEO must proceed to make the TCO.
There are no specific offences or penalties mentioned within the explanatory statement for the failure to comply with the provisions of this TCO. However, non-compliance with the Customs Act 1901 or Customs Regulations 1993 more broadly could result in penalties. These may include fines, imprisonment, or both, depending on the severity of the breach. The Act and associated regulations provide for a range of administrative, civil, and criminal penalties for breaches, including the imposition of fines and potential imprisonment terms.
In summary, Tariff Concession Instrument No. 0844063 facilitates the application for and issuance of TCOs that provide tariff concessions on certain electric resistance welded tubing. The Act clearly outlines the process for application and review, ensuring that the concession applies only when specific criteria are met. The rights of importers are protected, with provisions for duty refunds where applicable, while the process ensures that no existing liabilities or rights are adversely affected.