EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0902682
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.
Citic Pacific Mining Management applied for a TCO in respect of certain spirally welded steel pipes on 27 January 2009.
Instrument
TCO No 0902682 was made on 24 April 2009. It declares that those certain spirally welded steel pipes 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. 0902682 is taken to have come into force on 27 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, includes provisions for Tariff Concession Orders (TCOs) under Part XVA. This legislative instrument was introduced to address the issue of providing tariff concessions on certain imported goods, thereby potentially promoting trade and economic activity. The act allows the Chief Executive Officer of Customs to consider applications for TCOs, which grant lower rates of customs duty on specified goods. This scheme is designed to support importers by reducing the cost of certain goods, provided that no substitutable goods are produced in Australia. The explanatory statement details the process for applying for a TCO, the criteria for approval, and the commencement of the concession, which is effective from the date the application was lodged. The policy objective is to facilitate easier access to imported goods by reducing the duty rates, thereby benefiting the importers and potentially the broader economy.
Scope and Application
The Tariff Concession Instrument No. 0902682, made under Part XVA of the Customs Act 1901, applies to specific goods for which an applicant has sought tariff concessions from the Chief Executive Officer of Customs. The instrument, which became effective on 27 January 2009, pertains to certain spirally welded steel pipes for which Citic Pacific Mining Management applied for a tariff concession order (TCO). The Act requires that the CEO must make a TCO if the application meets the core criteria, which include the absence of substitutable goods produced in Australia in the ordinary course of business. The TCO declares these pipes as eligible for a zero rate of duty, down from the general rate of 5%, based on the absence of domestic production of such substitutable goods. The TCO applies nationally and does not disadvantage any person or impose liabilities on anyone other than the Commonwealth. The instrument does not affect any rights as of the date of registration or impose liabilities for actions taken prior to the registration date. The instrument’s application is limited to the goods specified in the TCO and does not extend to any other goods unless covered by a subsequent TCO.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 0902682 under the Customs Act 1901, involve the application process for Tariff Concession Orders (TCOs) and the conditions under which these orders can be granted. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods, provided the goods do not fall under the prohibited categories outlined in section 269SJ. If the CEO is satisfied that the application meets the core criteria set out in section 269C, which requires that no substitutable goods are produced in Australia on the day the application was lodged, the CEO must make a written TCO order (section 269P(3)). For instance, in this case, the CEO was satisfied that no substitutable goods were produced in Australia concerning certain spirally welded steel pipes, leading to the issuance of TCO No. 0902682.
The obligations and requirements imposed by this Act on the parties involved are primarily centered around the application and approval process for TCOs. The CEO must ensure that the application meets the specified criteria before issuing a TCO, which includes verifying that no substitutable goods are being produced in Australia. Additionally, the CEO is obligated to publish a notice in the Gazette (subsection 269K(1)) inviting any interested parties to lodge submissions if they believe the TCO should not be granted. This transparency measure ensures that all potential stakeholders have an opportunity to voice their concerns. In the case of TCO No. 0902682, no submissions were received, facilitating the smooth issuance of the order.
In terms of consequences for non-compliance or breaches of the Act, the legislation does not explicitly outline specific offences or penalties within the provided text. However, it is implied that any misuse or improper application of TCOs could potentially lead to legal ramifications. The Act ensures that the rights of importers will be beneficially affected by the TCO, and it explicitly states that the TCO does not impose any liabilities on any person other than the Commonwealth. Under paragraph 126(1)(r) of the Regulations, importers can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force. Therefore, while the specific penalties for breaches are not detailed, the Act ensures that legitimate importers will not be disadvantaged or unfairly burdened by the TCO provisions.