EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0914018
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.
Esso Australia Resources applied for a TCO in respect of certain line pipe induction bends on 28 April 2009.
Instrument
TCO No 0914018 was made on 17 July 2009. It declares that those certain line pipe induction bends 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. 0914018 is taken to have come into force on 28 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. 0914018, enacted under the Customs Act 1901, addresses the need for concessional tariff rates for certain goods by providing a mechanism for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs). This process allows for lower customs duties on specified goods when no substitutable goods are produced in Australia. The instrument was introduced to support economic efficiency and trade facilitation by ensuring that certain imported goods are not subject to prohibitive tariffs, thereby promoting competitive pricing and broader market access. The policy objective aligns with the broader legislative intent to streamline customs procedures and reduce barriers to trade, ultimately benefiting importers and consumers.
The Instrument was enacted by the Commonwealth Parliament, as it modifies the application of the Customs Act 1901 to facilitate tariff concessions. The process involves an application to the CEO for a TCO, followed by a review to ensure the application meets the core criteria, and concludes with the issuance of a TCO if the criteria are satisfied. The absence of submissions against the TCO application indicates a lack of opposition to the tariff concession, reflecting a consensus on the benefits of reduced duties for the specified goods.
Scope and Application
The Tariff Concession Instrument No. 0914018 under the Customs Act 1901 applies specifically to certain line pipe induction bends, following an application by Esso Australia Resources. The legislation permits the Chief Executive Officer of Customs to grant a Tariff Concession Order (TCO) that reduces the rate of customs duty for specified goods, provided that no substitutable goods are produced in Australia. The Act applies to any person or entity that applies for a TCO for goods, and its application is confined to the goods specified in the TCO. The geographic reach of this Act is national, as it pertains to the Commonwealth of Australia and its customs duties. Exclusions to this Act include goods listed in section 269SJ, which cannot be subject to a TCO, and any liabilities imposed by the TCO are restricted to the Commonwealth. The TCO becomes effective on the date the application was lodged, meaning it has retroactive application from that date. The Act may be further extended or specified through subordinate instruments, which can detail additional criteria or procedures for TCO applications.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 0914018 under the Customs Act 1901, are sections 269C, 269F, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO), which provides a lower rate of customs duty on specified goods. Section 269C stipulates that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, they must make a written order under section 269P, declaring that the specified goods are subject to a particular item in Schedule 4 of the Customs Tariff Act 1995. Section 269S provides that a TCO comes into force on the day the application for the TCO is lodged.
The obligations imposed on parties by this Act include the requirement for the CEO to evaluate TCO applications to ensure they meet the core criteria as outlined in section 269C. The CEO must also publish a notice in the Gazette inviting any interested parties to submit reasons why a TCO should not be made, as required by section 269K(1). Additionally, section 269S mandates that the TCO come into effect on the day the application is lodged, ensuring that any rights or benefits are applied retroactively from that date. Importers, in particular, are entitled to apply for a refund of duties paid on goods imported since the TCO is taken to have come into force, as stipulated in paragraph 126(1)(r) of the Regulations.
Breaches of the provisions in this Act can lead to civil and criminal consequences. While the specific offences and penalties are not detailed in the Explanatory Statement, the Customs Act 1901 generally provides for significant penalties for non-compliance. These may include fines and imprisonment for individuals, and fines for corporate entities. The exact penalties depend on the nature and severity of the breach, as well as any specific provisions outlined in related legislation or regulations. The Act's provisions ensure that any liabilities imposed by the TCO do not affect the rights of individuals or entities other than the Commonwealth, and do not disadvantage them regarding actions taken before the TCO's effective date.