EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0927136
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.
Bluescope Steel applied for a TCO in respect of certain pipe or tube fittings on 28 July 2009.
Instrument
TCO No 0927136 was made on 09 October 2009. It declares that those certain pipe or tube fittings 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. 0927136 is taken to have come into force on 28 July 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 establish a comprehensive framework for the administration of customs and excise duties. The Tariff Concession Instrument No. 0927136, made under the Act in 2010, addresses the problem of providing tariff concessions for certain goods, particularly in instances where no substitutable goods are produced in Australia. This instrument allows for the application of a lower rate of customs duty on specified goods, subject to the approval of the Chief Executive Officer of Customs, ensuring that the application meets core criteria such as the absence of substitutable goods produced domestically. The policy objective behind this legislation is to facilitate the import of goods that are not locally produced, thereby supporting economic efficiency and consumer choice while ensuring that the rights of existing importers are protected.
Scope and Application
The Customs Act 1901, specifically through Part XVA, governs the process of making Tariff Concession Orders (TCOs), which allow for a lower rate of customs duty on certain goods. These orders are issued by the Chief Executive Officer of Customs (CEO) upon application and upon satisfying specific criteria under the Act. An application for a TCO may be made by any person, but it must not pertain to goods specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. The CEO is required to consider whether the application meets the core criteria outlined in section 269C, which involves determining if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If these conditions are met, the CEO must issue a TCO, as specified in section 269P(3), declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, with the associated duty rate specified in the order. In the case of Bluescope Steel's application for a TCO concerning certain pipe or tube fittings, the CEO determined that no substitutable goods were produced in Australia, leading to the issuance of TCO No. 0927136, which took effect on 28 July 2009. This instrument declares that the certain pipe or tube fittings are subject to item 50 of Schedule 4 to the Tariff, with the general rate of duty being 5%, while the rate for these goods under the TCO is free.
Key Provisions
The main operative sections of this legislation pertain to the establishment and effects of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F (1) allows for the application of a TCO for certain goods, while section 269C outlines the core criteria that must be met for an application to be considered valid. This includes the requirement that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269C(1)(a)). If the Chief Executive Officer of Customs (CEO) is satisfied that these criteria are met, they must make a written order (section 269P(3)). This order is specified in the Customs Tariff Act 1995, and in this case, it applies to certain pipe or tube fittings, granting them a free rate of duty instead of the general rate of 5% (Schedule 4, item 50).
The Customs Act 1901 imposes several obligations on parties applying for a TCO. The applicant must ensure that the goods in question are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. Furthermore, the applicant must provide sufficient evidence to demonstrate that the core criteria are met, particularly that no substitutable goods were produced in Australia in the ordinary course of business. Once an application is accepted, the CEO must publish a notice in the Gazette, inviting submissions from any interested parties (section 269K(1)). The CEO is also required to consider any submissions received before making a decision on the application.
There are no explicit offences or penalties mentioned in the Act for breach of TCO regulations. However, the legal framework is designed to ensure that the concessions granted do not unfairly disadvantage any party. If the rights of a person (other than the Commonwealth) are adversely affected by the TCO, they can seek recourse through the provisions of the Customs Act and associated regulations. For instance, under paragraph 126(1)(r) of the Regulations, importers can apply for a refund of duty on goods imported since the TCO is taken to have come into force. This mechanism ensures that while the TCO aims to provide tariff concessions, it does so without imposing any liabilities on any person, thereby maintaining a balance in the application of the law.