EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0910400
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.
Global Pipe Australia Pty Ltd applied for a TCO in respect of certain pipes on 27 March 2009.
Instrument
TCO No 0910400 was made on 07 August 2009. It declares that those certain 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 10%. 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. 0910400 is taken to have come into force on 27 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 was enacted by the Parliament of Australia to provide a regulatory framework for customs and border control in Australia, including the imposition of customs duties and the facilitation of international trade. Part XVA of the Act introduces a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (CEO) to provide tariff concessions on certain imported goods. This scheme was introduced to address the need for tariff flexibility to support Australian industries, particularly in cases where no suitable domestic alternatives exist. Tariff Concession Instrument No. 0910400, made on 7 August 2009, is an example of such a concession, which in this case applies to certain pipes, setting their customs duty rate to free, as no substitutable goods were produced in Australia at the time of the application. The policy objective is to support industries by reducing import costs where no local production of equivalent goods occurs, thereby encouraging competitive and efficient trade practices.
Scope and Application
The Tariff Concession Instrument No. 0910400 is part of the Customs Act 1901, which allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) for specific goods, reducing the rate of customs duty applied to them. This particular TCO applies to certain pipes that Global Pipe Australia Pty Ltd sought to have recognised under the scheme. The application of this Act is limited to the goods specified in the TCO, and it does not extend to any other goods or entities not mentioned in the application. The Act operates on a national level, with the CEO of Customs making decisions that affect imports and duties across Australia. The TCO does not disadvantage any person other than the Commonwealth and does not impose liabilities on any person for actions taken before the date of the TCO's registration. Any party with a concern regarding the issuance of a TCO can submit a submission to the CEO, although in this instance, no submissions were received. The TCO applies retroactively to the date of the original application, allowing for potential refunds of duties paid on the specified goods since that date.
Key Provisions
The Customs Act 1901, specifically under Part XVA, establishes the framework for Tariff Concession Orders (TCOs), which are orders made by the Chief Executive Officer (CEO) of Customs that apply a lower rate of customs duty to certain goods (s 269F). An application for a TCO can be made by a person if the goods in question are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria, as outlined in sections 269C and 269P(3), they must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. This process was followed in the case of Global Pipe Australia Pty Ltd, whose application for a TCO regarding certain pipes was accepted on 7 August 2009.
The obligations imposed by the Act on parties or entities include ensuring that any application for a TCO is made in accordance with the provisions of Part XVA of the Customs Act 1901. The CEO has a duty to assess whether the application meets the core criteria, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. This involves determining whether the goods in question are 'substitutable goods', as defined by section 269D of the Act, and whether they were produced in Australia under 'ordinary course of business' as per section 269E. If the CEO determines that the application meets these criteria, they are required to publish a notice in the Gazette inviting submissions from any person who may have reasons why the TCO should not be made. The CEO must then consider any submissions received before making a final decision.
Breaching the provisions of the Customs Act 1901, including the requirements for applying for and making a TCO, can result in various consequences. The Act does not specify particular offences or penalties related to TCOs, but it does outline potential consequences for broader breaches of customs laws. These may include fines and imprisonment for violations such as failing to comply with customs regulations, making false statements, or engaging in fraudulent activities. The specific penalties can vary widely depending on the nature and severity of the breach, but they are determined under the general provisions of the Customs Act 1901 and related legislation. Additionally, there may be civil consequences such as the imposition of financial penalties or the recovery of duties and taxes owed.