EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0906324
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.
Icon Valve Group applied for a TCO in respect of certain pipeline blind on 24 February 2009.
Instrument
TCO No 0906324 was made on 22 May 2009. It declares that those certain pipeline blind 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. 0906324 is taken to have come into force on 24 February 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 Tariff Concession Instrument No. 0906324 was enacted in 2009 under the Customs Act 1901 to provide tariff concessions on certain pipeline blinds. This legislation addresses the gap in providing duty-free concessions for specific imported goods not produced in Australia, thereby facilitating trade and reducing costs for importers. The instrument was introduced by the Chief Executive Officer of Customs, who determined that the pipeline blinds in question met the core criteria set out in section 269C of the Customs Act, which requires that no substitutable goods were produced in Australia on the day the application was lodged. This legislative action was taken to support the policy objective of promoting efficient trade practices and reducing import costs for businesses. The instrument was published in the Gazette to allow for any objections, none of which were received, and it came into effect on the date of the application, 24 February 2009.
Scope and Application
The Customs Act 1901, specifically Part XVA, provides a framework for the Chief Executive Officer of Customs (CEO) to make Tariff Concession Orders (TCO) on the application of a person, under which a lower rate of customs duty applies to specified goods. The application of the Act is national in scope, extending across the Commonwealth of Australia. The Act applies to any person seeking to have certain goods subject to a TCO, provided the goods are not specified in section 269SJ, which excludes certain goods from the scheme. For a TCO to be made, the CEO must be satisfied that no substitutable goods are produced in Australia at the time the application is lodged, as per section 269C. In the case of Icon Valve Group's application for a TCO on certain pipeline blinds, the CEO was satisfied that no such substitutable goods were produced in Australia, and thus a TCO was issued, reducing the duty on these goods from 5% to free. The application of the Act may be extended or restricted through subordinate instruments, which allow for the detailed regulation of the TCO process and the specific criteria for concession eligibility.
Key Provisions
The primary sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCOs) include sections 269F, 269C, 269B, and 269P. Section 269F allows any person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods, provided the goods are not specified in section 269SJ. If the application is deemed valid and meets the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, the CEO must make a written order (a TCO). This written order, detailed in section 269P, declares that the goods the subject of the TCO application are subject to a prescribed rate of customs duty specified in the order.
The Act imposes specific obligations on both the applicant and the CEO. For the applicant, the obligation is to submit a valid application that meets the core criteria. This involves demonstrating that no substitutable goods were produced in Australia in the ordinary course of business at the time of application. For the CEO, the obligation is to review the application, ensure it complies with the criteria, and if satisfied, proceed to make a TCO. Additionally, under section 269K, the CEO must publish a notice in the Gazette inviting any person who believes the TCO should not be made to lodge a submission. The CEO must then consider these submissions before deciding on the TCO.
Failure to comply with the requirements of the Customs Act 1901 can lead to various consequences. If a person submits a false or misleading application for a TCO, this could be considered an offence under the Act. The specific penalties for such offences are not detailed in the explanatory statement but may include fines or imprisonment as stipulated under the general provisions of the Act. Furthermore, the Act ensures that the rights of persons are protected in relation to the TCOs. For instance, the rights of a person, other than the Commonwealth, as at the date of registration are not to be disadvantaged or impose liabilities in respect of anything done or omitted to be done before the date of registration. This protection extends to importers who can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force.