EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0845335
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 fabricated alloy steel pipe on 24 December 2008.
Instrument
TCO No 0845335 was made on 20 March 2009. It declares that those certain fabricated 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. 0845335 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 Customs Act 1901, enacted by the Australian Parliament, establishes a framework for the regulation of customs and excise, including the imposition of tariffs on imported goods. Among its provisions, Part XVA introduces the mechanism for Tariff Concession Orders (TCOs), allowing for the reduction or exemption of customs duty on specific goods. The primary objective of this part of the Act is to provide a pathway for applicants to seek tariff concessions for goods that are not produced domestically or for which there are no suitable domestic substitutes, thereby encouraging trade and investment. The Tariff Concession Instrument No. 0845335, issued on 20 March 2009, is an example of this mechanism in action, where a TCO was granted to Origin Energy Power for certain fabricated alloy steel pipes, reducing the applicable duty rate from 5% to free, effective from 24 December 2008. This legislative tool aims to support industries by reducing costs associated with imported goods, thereby fostering economic efficiency and competitiveness.
Scope and Application
The Tariff Concession Instrument No. 0845335 under the Customs Act 1901 applies to entities or individuals seeking tariff concessions on certain fabricated alloy steel pipes. This legislation operates under the authority of the Chief Executive Officer of Customs, who is tasked with determining whether a tariff concession order should be made based on the criteria outlined in the Act. Specifically, the application of this Act is triggered when an entity applies for a tariff concession order, and the CEO must assess whether the application meets the core criteria, which include the absence of substitutable goods being produced in Australia. The geographic scope of this legislation is the Commonwealth of Australia, and it applies nationally. Any entity or individual who wishes to import these specified goods can benefit from this concession, provided no substitutable goods are produced domestically. The instrument extends or restricts its application through subordinate instruments as necessary to adapt to changes in production and trade patterns within Australia. The Act does not disadvantage any person by affecting their rights as at the date of registration, nor does it impose any liabilities on persons other than the Commonwealth.
Key Provisions
The main operative sections of the Customs Act 1901, as relevant to Tariff Concession Instrument No. 0845335, are sections 269F, 269C, 269B, 269D, 269E, 269P, and 269SJ. Section 269F allows an application for a Tariff Concession Order (TCO) to be made to the Chief Executive Officer of Customs (CEO) for goods. If the application is not in respect of goods specified in section 269SJ, which outlines those goods that cannot be subject to a TCO, the CEO must assess if it meets the core criteria under sections 269C and 269P. Specifically, section 269C mandates that the application meets the core criteria if, on the day it was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P(3) then requires the CEO to make a written order if the application meets these criteria. This TCO declares that the specified goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, effectively applying a lower rate of duty.
The obligations imposed by the Act on parties or entities it governs are primarily directed towards ensuring the proper application and assessment of TCOs. The CEO must review TCO applications to ensure they do not pertain to goods listed in section 269SJ. If an application is deemed valid, the CEO must satisfy the core criteria outlined in sections 269C and 269P, which include verifying the non-existence of substitutable goods in Australia. Additionally, as per subsection 269K(1), the CEO is required to publish a notice in the Gazette inviting submissions from interested parties on whether the TCO should be made. This ensures transparency and allows stakeholders to voice any objections.
In terms of offences, penalties, or consequences for breach, the Act does not explicitly outline specific penalties for non-compliance with the TCO provisions. However, any failure to comply with the Act's requirements for making or assessing TCOs could result in legal consequences under the broader administrative and compliance frameworks. For example, incorrect or misleading information provided in an application might lead to enforcement actions under other sections of the Customs Act or related regulations. Although the Act itself does not detail maximum penalties, general penalties for breaches of customs regulations can include fines and other sanctions as prescribed by the relevant legislation.