EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0902319
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.
Hydronic Systems Pty Ltd applied for a TCO in respect of certain pipe fittings on 23 January 2009.
Instrument
TCO No 0902319 was made on 17 April 2009. It declares that those certain pipe fittings 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. 0902319 is taken to have come into force on 23 January 2009.
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, introduced a scheme under which Tariff Concession Orders (TCOs) could be made by the Chief Executive Officer of Customs (CEO) to provide lower rates of customs duty on specified goods. The 2009 Tariff Concession Instrument No. 0902319 was established to address the specific problem of ensuring that goods, which could not be substituted by locally produced alternatives, would benefit from tariff concessions. This was aimed at fostering economic efficiency and supporting industries by reducing the cost burden on imported goods that had no domestic equivalent. The policy objective was to encourage the importation of goods that are not produced domestically while ensuring that the rights of importers are protected and no undue disadvantage is imposed on any party prior to the TCO's registration.
Scope and Application
The Tariff Concession Instrument No. 0902319 applies to certain pipe fittings specified in the instrument, allowing for a lower rate of customs duty for these goods as specified under the Customs Act 1901. This Act applies to persons or entities who wish to import these particular goods into Australia, thereby providing them with the benefit of tariff concessions. The geographic reach of this legislation is national, as it operates under the Commonwealth of Australia. The Act does not apply to goods specified in section 269SJ of the Customs Act 1901, which are ineligible for tariff concessions. Additionally, any application for a Tariff Concession Order (TCO) must be made to the Chief Executive Officer of Customs (CEO), who assesses whether the application meets the core criteria, primarily that no substitutable goods were produced in Australia at the time of application. The TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person; rather, it allows importers to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force.
Key Provisions
The primary operative sections of this legislation (F2009L02028) pertain to the process and criteria for the issuance of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows an individual to apply to the Chief Executive Officer (CEO) of Customs for a TCO in relation to specific goods, provided these goods are not excluded under section 269SJ. Once an application is deemed valid and not concerning excluded goods, the CEO must determine if the application meets the core criteria set out in section 269C. This involves ensuring that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, with definitions provided in sections 269D, 269E and 269F. If these criteria are satisfied, the CEO must issue a TCO, as mandated by subsection 269P(3), which specifies the reduced customs duty rate applicable to the goods in question.
The obligations imposed by this Act on the parties involved are primarily on the CEO of Customs, who must carefully assess each TCO application to ensure it meets the statutory criteria. The CEO is required to publish a notice in the Gazette (subsection 269K(1)) inviting submissions from any interested parties who may have objections to the TCO being issued. In the case of TCO No 0902319, no submissions were received, facilitating the CEO's decision to proceed with the order. Additionally, the Act stipulates that the rights of any person other than the Commonwealth are not adversely affected by the TCO, and it does not impose any new liabilities. Instead, it provides a benefit to importers who can apply for a refund of duty on goods imported since the TCO was taken to have come into force, as outlined in paragraph 126(1)(r) of the Regulations.
The legislation does not explicitly outline specific offences or penalties for breaches of the TCO provisions. However, general compliance with customs regulations and the processes outlined in the Customs Act 1901 is paramount. Failure to adhere to the stipulated procedures or making false statements in an application could potentially lead to legal consequences under broader customs laws, including fines and imprisonment for serious violations. The precise penalties would depend on the nature and severity of the breach, but they could include substantial fines and terms of imprisonment for persistent or egregious non-compliance.