EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0912064
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.
Saipem Pty Ltd applied for a TCO in respect of certain floating rubber hose on 09 April 2009.
Instrument
TCO No 0912064 was made on 03 July 2009. It declares that those certain floating rubber hose 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. 0912064 is taken to have come into force on 09 April 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 Parliament of Australia, facilitates the application of reduced customs duty rates on specific goods through Tariff Concession Orders (TCOs). This legislative framework was introduced to address the need for flexibility in tariff application, ensuring that Australian industries can import necessary goods without incurring prohibitive duties. The Tariff Concession Instrument No. 0912064, made on 03 July 2009, exemplifies this process by granting a tariff concession to Saipem Pty Ltd for certain floating rubber hose, effectively reducing the duty from 5% to free. This was enacted following a successful application and meeting of the core criteria under section 269C, which necessitates that no substitutable goods are produced in Australia. The policy objective, as implied in the Act, is to support Australian industries by making essential imports more affordable, thereby promoting economic efficiency and competitiveness.
Scope and Application
The Tariff Concession Instrument No. 0912064 applies to goods specified in the instrument, namely certain floating rubber hoses, and is made under Part XVA of the Customs Act 1901. This Act governs the application process for Tariff Concession Orders (TCOs) which lower the rate of customs duty on specified goods, provided they meet certain criteria. The instrument applies to any person who imports or intends to import the specified goods into Australia, subject to the conditions outlined in the Customs Act. The scope of this Act is limited to the goods explicitly mentioned in the instrument, and it does not extend to other goods unless specified by a subsequent TCO. The instrument's jurisdiction is national, applying across all states and territories of Australia. There are specific exclusions as per section 269SJ of the Act, which lists goods that cannot be subject to a TCO. Additionally, the Act may be extended or modified through subordinate instruments such as regulations and orders made under the authority of the Customs Act. The instrument became effective on the date the application was lodged, 09 April 2009, and does not affect the rights of persons as at the date of registration concerning actions taken prior to this date.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0912064, made under the Customs Act 1901 (section 269F), include the process for applying for a Tariff Concession Order (TCO) and the criteria for approval. Section 269C stipulates that a TCO application meets the core criteria if no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. Section 269B clarifies the meanings of terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods'. If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they must make a written TCO order under section 269P(3), specifying the applicable duty rate.
The Act imposes obligations on both the applicant and the CEO. The applicant must ensure their application for a TCO is valid and meets the criteria specified in section 269C. The CEO has the duty to assess the application and determine whether it meets the core criteria. Once the CEO is satisfied, they must make a TCO as required by section 269P(3). Additionally, the CEO must publish a notice in the Gazette under section 269K(1), inviting any interested party to submit reasons why the TCO should not be made, although in this case, no submissions were received.
Breaching the obligations set out in the Customs Act 1901 can lead to civil and criminal consequences. The Act does not explicitly state maximum penalties for non-compliance with TCOs, but general provisions under the Customs Act may apply. For instance, misleading or fraudulent statements made in connection with customs duties can lead to fines and imprisonment under section 229 of the Act. The severity of penalties depends on the nature and extent of the breach, and they can include substantial fines and imprisonment for serious offences.
The TCO itself does not impose any liabilities on any person and does not affect the rights of a person as at the date of registration in a way that disadvantages them or imposes liabilities for actions taken before the registration date. Importers, however, will be beneficially affected as they can apply for a refund of duty on goods imported since the TCO came into force under paragraph 126(1)(r) of the Regulations. This provision ensures that the TCO operates within a framework that protects the interests of all parties involved.