EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0914155
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 Pty Ltd applied for a TCO in respect of certain induction bends line pipe carbon steel on 29 April 2009.
Instrument
TCO No 0914155 was made on 17 July 2009. It declares that those certain induction bends line pipe carbon steel 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. 0914155 is taken to have come into force on 29 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. 0914155, made under the Customs Act 1901, was enacted to address a specific gap in tariff concessions for certain types of goods imported into Australia. The problem this instrument was designed to address involved the application of customs duties to specific goods, in this case, induction bends line pipe carbon steel, which were subject to a higher tariff rate. By establishing a Tariff Concession Order (TCO), the Chief Executive Officer of Customs (CEO) can grant tariff concessions for these goods, reducing the rate of customs duty from the general 5% to free. This was enacted to ensure that Australian businesses could access necessary materials at a lower cost, thereby supporting economic efficiency and competitiveness.
The instrument was introduced by the CEO of Customs and was made on 17 July 2009, effective from 29 April 2009, the date the application was lodged. The CEO was satisfied that the application met the core criteria as no substitutable goods were produced in Australia at the time. The policy objective of this legislation is to provide tariff concessions where appropriate, ensuring that Australian businesses are not unduly burdened by high customs duties, while also maintaining a fair and efficient customs system.
Scope and Application
The Tariff Concession Instrument No. 0914155, made under the Customs Act 1901, applies to goods specified in the instrument, namely certain induction bends line pipe carbon steel, for which a Tariff Concession Order (TCO) has been issued. This instrument is directed towards entities and individuals involved in the importation of these specific goods, allowing them to benefit from a reduced rate of customs duty as outlined in the instrument. The instrument’s geographic reach is national, as it pertains to the application of the Customs Act 1901 across Australia. Any person or entity importing these specified goods can avail themselves of the concessions provided by this TCO. However, the Act excludes certain goods, as specified in section 269SJ, from being subject to a TCO. The application process for a TCO is further regulated by the Act, requiring the Chief Executive Officer of Customs to assess whether the application meets core criteria such as the non-existence of substitutable goods produced in Australia. The instrument extends the application of the Customs Act 1901 through subordinate instruments, ensuring the specified goods are treated under the designated tariff concessions.
Key Provisions
The key provisions of the Tariff Concession Instrument No. 0914155, as outlined in the Customs Act 1901, involve the granting of tariff concessions for certain goods. Specifically, section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) regarding goods. The CEO is required to decide whether the application meets the core criteria set out in section 269C, which essentially means that no substitutable goods are produced in Australia in the ordinary course of business on the date the application was lodged (section 269P(3)). If the CEO is satisfied that the application meets these criteria, a written order is made, declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (section 269P(3)). In this case, TCO No. 0914155 was made for certain induction bends line pipe carbon steel, applying the free rate of duty previously at 5%.
The obligations imposed by the Act on the parties involved include the CEO's duty to assess whether the application for a TCO meets the core criteria and, if so, to issue the concession order. The applicant must ensure their application is valid and that no substitutable goods are being produced in Australia. Additionally, section 269K(1) requires the CEO to publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be made. In this instance, no submissions were received.
For breaches of the provisions or obligations under the Customs Act 1901, the Act provides for various civil and criminal consequences. While the specific penalties are not detailed in the explanatory statement, typically, breaches of customs regulations can result in fines and potential imprisonment. The severity of penalties would depend on the nature and extent of the breach, with serious or repeated violations potentially incurring higher fines and longer prison sentences. The Customs Act 1901 and related regulations outline the specific penalties applicable to different types of breaches.