EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0845156
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.
Origin Energy Power applied for a TCO in respect of certain alloy steel pipe on 24 December 2008.
Instrument
TCO No 0845156 was made on 20 March 2009. It declares that those certain alloy steel 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. 0845156 is taken to have come into force on 24 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. 0845156, made under the Customs Act 1901, was enacted in 2009 to address the need for tariff concessions on specific imported goods. This legislation allows for a lower rate of customs duty on goods specified in a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs. Origin Energy Power's application for a TCO concerning certain alloy steel pipe in December 2008 led to the instrument, which came into force on the date of the application. The core criteria for this concession include the absence of substitutable goods produced in Australia at the time of the application. The instrument was published in the Gazette with an invitation for submissions, none of which were received. This TCO aims to provide tariff relief to importers without imposing liabilities or disadvantaging any persons other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0845156 under the Customs Act 1901 applies to individuals or entities that seek tariff concessions for specific goods. The process involves an application to the Chief Executive Officer of Customs, who must determine if the application meets the core criteria outlined in the Act. These criteria include assessing whether the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business. If satisfied, the CEO issues a Tariff Concession Order (TCO) which applies a reduced or free rate of customs duty to the specified goods, in this case certain alloy steel pipes, as per the instrument. The TCO’s application is retroactive to the date the application was lodged, ensuring that no pre-existing rights are adversely affected. Exemptions from the TCO are limited to those goods specified under section 269SJ of the Act, which cannot be subject to a TCO. The scope of the TCO is national, as it is an instrument of the Commonwealth, and its application is governed by the Customs Act 1901 and the Customs Tariff Act 1995.
Key Provisions
Section 269F of the Customs Act 1901 (the Act) permits an application to be made to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of specific goods. If the CEO determines that the application is not in respect of goods listed in section 269SJ, which are ineligible for a TCO, the CEO must then assess whether the application meets the core criteria set out in section 269C. A TCO application meets these criteria if, on the date of lodgement, no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269D and 269E, respectively. If the CEO is satisfied that the application meets the core criteria, a TCO must be issued under section 269P(3), declaring that the specified goods are subject to a particular item in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed on the parties by this legislation include the requirement for the CEO to evaluate the validity of a TCO application against the core criteria, ensuring that no substitutable goods were produced in Australia in the ordinary course of business at the time of application. Additionally, the CEO must publish a notice in the Gazette, inviting submissions from any person who believes that the TCO should not be granted, as per subsection 269K(1). In the case of TCO No. 0845156, which pertains to certain alloy steel pipe, the CEO must also ensure that the concessional tariff rate applies to the goods and that any affected parties, particularly importers, are informed of their right to apply for a refund of duty paid on these goods since the TCO came into force.
Any breach of the provisions of the Customs Act 1901 can result in civil or criminal penalties, depending on the nature and severity of the violation. The specific offences, penalties, and consequences for breach are detailed in the relevant sections of the Act and the associated regulations. For instance, while the explanatory statement does not explicitly outline penalties for non-compliance with the TCO provisions, it is understood that failure to adhere to the requirements could lead to legal action, fines, or other civil or criminal consequences as prescribed by the Act. In the context of this particular TCO, the absence of any submissions against the application suggests that the process was followed correctly, and there were no reported breaches at the time of the instrument's issuance.