EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0908358
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.
Stauff Corporation applied for a TCO in respect of certain pipe and tube fittings on 11 March 2009.
Instrument
TCO No 0908358 was made on 29 May 2009. It declares that those certain pipe and tube 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. 0908358 is taken to have come into force on 11 March 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, facilitates the application of lower customs duty rates through Tariff Concession Orders (TCOs) for specific goods. These orders are instrumental in addressing economic challenges and competitive market needs by providing tariff relief to certain goods, thereby enhancing trade efficiency. In this context, the Tariff Concession Instrument No. 0908358, made under the authority of the Customs Act 1901, provides a tariff concession for certain pipe and tube fittings, reducing the duty from the general rate of 5% to free. This instrument was introduced to address the specific need of Stauff Corporation, which applied for the concession on 11 March 2009. The Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, thus satisfying the core criteria for the concession. The instrument came into force on the same date as the application, ensuring that importers can benefit from the reduced duty rate and potentially apply for refunds on duties paid prior to the concession's effective date.
Scope and Application
The Customs Act 1901, through its Tariff Concession Instrument No. 0908358, provides for the application of reduced customs duties on specified goods, in this case certain pipe and tube fittings, via Tariff Concession Orders (TCOs). The Act applies to any person or entity seeking a concession on customs duties for imported goods, provided these goods meet the criteria outlined in the Act, notably that no substitutable goods are produced in Australia in the ordinary course of business. The scope of this legislation is Commonwealth-wide, affecting all jurisdictions within Australia. The instrument was made under the authority granted to the Chief Executive Officer of Customs, who must assess applications to ensure they do not pertain to goods that are specifically excluded from concession under section 269SJ of the Act. Once a TCO is granted, the specified goods benefit from a tariff rate of free, as opposed to the general rate of 5%, and this concession is retroactive to the date the application was lodged. The rights of existing importers are preserved, and they may apply for refunds of duties paid on imports since the effective date of the TCO. Notably, the TCO does not impose any new liabilities on any person or entity.
Key Provisions
The key operative sections of this legislation include section 269F, which allows for an application to be made to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). Section 269C outlines the core criteria that the CEO must consider when deciding whether to grant an application, focusing on whether substitutable goods are produced in Australia. Section 269P(3) mandates that if the CEO is satisfied with the application, a written order (a TCO) must be issued, specifying the reduced rate of customs duty that applies to the goods in question. These sections ensure that the process for tariff concessions is transparent and based on clear criteria.
The obligations imposed by this Act on the parties involved are primarily on the CEO of Customs. Upon receiving an application for a TCO, the CEO must first determine whether the application meets the core criteria set out in section 269C. This includes verifying that no substitutable goods are produced in Australia. If these criteria are met, the CEO is required to make a written TCO, as per section 269P(3). Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be granted. These obligations ensure that the process for granting tariff concessions is fair and considers all relevant interests.
Should any party breach the requirements set out in this Act, there are specific consequences. However, the legislation does not explicitly outline offences, penalties, or civil/criminal consequences for breaches of the TCO process itself. The primary focus of the Act is on ensuring that the tariff concession process is conducted fairly and transparently. If there were to be any breaches, they would likely be subject to general legal consequences, such as administrative penalties or legal action for non-compliance with the Customs Act 1901. The Act ensures that the rights of importers are protected and that the process for tariff concessions is adhered to, thereby maintaining the integrity of the customs duty system.