EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0912352
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.
Robbins Industrial Services applied for a TCO in respect of certain pipe penetration seals on 15 April 2009.
Instrument
TCO No 0912352 was made on 10 July 2009. It declares that those certain pipe penetration seals 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. 0912352 is taken to have come into force on 15 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 Tariff Concession Instrument No. 0912352 was enacted in 2009 under the Customs Act 1901. This legislation was introduced to address the need for a streamlined process by which the Chief Executive Officer of Customs can grant tariff concessions on specific goods, thereby promoting efficient trade practices and potentially reducing costs for importers. The instrument was made in response to an application by Robbins Industrial Services regarding certain pipe penetration seals, for which no substitutable goods were produced in Australia, satisfying the core criteria set out in the Act. The instrument declares that these seals are subject to a 5% duty rate, down from the general rate, effective from the date of the application. The policy objective here is to facilitate smoother import processes by lowering the duty rates on specific goods, thereby encouraging trade and economic activity.
Scope and Application
The Tariff Concession Instrument No. 0912352, established under Part XVA of the Customs Act 1901, applies to any person who wishes to apply for a Tariff Concession Order (TCO) in relation to specific goods. This Act allows for a lower rate of customs duty for goods specified in a TCO, provided that the application is not for goods listed in section 269SJ of the Act which cannot be subject to a TCO. The application process requires that the goods in question are not substitutable by goods produced in Australia in the ordinary course of business, as per section 269C of the Act. The geographic reach of this Act is national, applying across Australia as a Commonwealth legislation. The Act extends its application through subordinate instruments, particularly by referencing the Customs Tariff Act 1995. The instrument in question, TCO No. 0912352, was applied for by Robbins Industrial Services on 15 April 2009, concerning certain pipe penetration seals, and was effective from the same date, as per subsection 269S(1) of the Act. This instrument specifically exempts these goods from the general 5% rate of duty, setting it at free, thereby providing a tariff concession.
Key Provisions
The key operative sections of the Customs Act 1901 relevant to the Tariff Concession Order (TCO) include section 269F, which allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods (section 269F). If the CEO is satisfied that the application meets the core criteria, which includes ensuring no substitutable goods are produced in Australia (section 269C), the CEO must make a written order declaring that the goods are subject to a prescribed rate of customs duty (section 269P(3)). The TCO in question, No. 0912352, was made on 10 July 2009 and declares that certain pipe penetration seals are subject to a zero rate of duty under item 50 of Schedule 4 to the Customs Tariff Act 1995, down from the general rate of 5% (section 269P(3)).
The Act imposes several obligations on the parties it governs. The CEO must ensure that any application for a TCO is not in respect of goods specified in section 269SJ of the Act, which are ineligible for TCOs (section 269F). The CEO must also satisfy the core criteria set out in section 269C, including verifying that no substitutable goods are produced in Australia. Additionally, the CEO must publish a notice in the Gazette inviting submissions on the TCO application, as per section 269K(1). Robbins Industrial Services, the applicant, must provide all necessary information and evidence to support their application for a TCO (section 269F).
Failing to meet the requirements or obligations outlined in the Customs Act 1901 can result in legal consequences. Under section 269K(1), if the CEO does not publish a notice in the Gazette as required, or if there are procedural errors in the application process, the TCO may be subject to review or invalidation. Section 269C specifies that if the core criteria are not met, the CEO must refuse the application. There are no specific penalties mentioned for breaches of the Act in the context of TCOs, but any failure to comply with the statutory requirements could result in the TCO being challenged in court, potentially leading to its annulment or other legal consequences.
The commencement of the TCO is significant as it retroactively applies from the date of the application, which was 15 April 2009 in this case (subsection 269S(1)). This means that importers of the specified goods can claim refunds for duties paid on imports made since that date (paragraph 126(1)(r) of the Regulations). The TCO does not affect the rights of any person as at the date of registration to the detriment of that person or impose any new liabilities (subsection 269S(1)). The rights of importers will be positively affected by the TCO, as they will benefit from the reduced or eliminated duty on the specified goods.