EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0902849
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 steel pipes on 27 January 2009.
Instrument
TCO No 0902849 was made on 24 April 2009. It declares that those certain 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. 0902849 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, provides a framework for the administration of customs and excise, including the mechanism for Tariff Concession Orders (TCOs) as outlined in Part XVA of the Act. The Customs Act 1901 was introduced to address the need for streamlined customs duty processes, particularly for businesses importing specific goods where local production alternatives are unavailable. This legislative provision enables the Chief Executive Officer of Customs to offer reduced or waived customs duties on certain imported goods, provided they meet the specified criteria. The policy objective is to support Australian businesses by reducing the cost of imported goods that are not produced domestically, thereby promoting competition and economic efficiency. The Tariff Concession Instrument No. 0902849, issued under this Act, exemplifies the application of these provisions, granting tariff concessions on certain steel pipes in response to an application from Citic Pacific Mining Management.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which allow for a lower rate of customs duty on specified goods. This scheme applies to individuals or entities that apply for a TCO in relation to goods, provided that these goods are not among those specified in section 269SJ of the Act, which are ineligible for tariff concessions. The application process requires the CEO to determine whether the applicant's goods meet the core criteria, particularly that no substitutable goods are produced in Australia in the ordinary course of business. The application is assessed against the definitions provided in sections 269D, 269E, and 269F of the Act. If the CEO is satisfied that the application meets the criteria, they must issue a TCO, as per section 269P(3). This specific legislation, Instrument No. 0902849, pertains to certain steel pipes and was issued to Citic Pacific Mining Management on 24 April 2009, reducing the duty from 5% to free, effective from the date of application, 27 January 2009. The Act's jurisdictional reach is national, applying across Australia, and it does not disadvantage any person in terms of rights or liabilities incurred prior to the issuance of the TCO.
Key Provisions
The main operative sections of the Customs Act 1901, specifically those pertaining to Tariff Concession Orders (TCOs), are detailed in Part XVA (sections 269C, 269B, 269D, 269E, 269F, 269P, and 269SJ). These sections establish the framework for the creation of TCOs, which apply a lower rate of customs duty to certain goods. An application for a TCO can be submitted by any person to the Chief Executive Officer of Customs (section 269F). The CEO must ensure that the application is not in respect of goods specified in section 269SJ, which are ineligible for a TCO. If the application meets the core criteria outlined in section 269C, the CEO is required to make a written order that specifies the applicable tariff concession. In this case, TCO No. 0902849 was made for certain steel pipes, which now attract a duty rate of free instead of the general rate of 5%.
The obligations and requirements imposed by the Act on the parties it governs include the necessity for the CEO to assess applications for TCOs against the core criteria. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties once an application is accepted as valid (subsection 269K(1)). If no submissions are received, the CEO proceeds to make the TCO. The rights of importers are protected under this process, as the TCO does not affect their rights as at the date of registration and may entitle them to a refund of duty on goods imported since the effective date of the TCO. The Act further specifies that the TCO does not impose any liabilities on any person.
There are no explicit offences, penalties, or civil/criminal consequences mentioned in the explanatory statement for breach of the provisions related to TCOs. However, any misuse or fraudulent application for a TCO could potentially lead to legal repercussions under other sections of the Customs Act or related legislation, such as offences under the Crimes Act 1914, which could include imprisonment and/or fines depending on the severity of the offence. The maximum penalties would be determined by the specific provisions of those other Acts.