EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0932753
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.
Crane Copper Tube Pty Ltd applied for a TCO in respect of certain tube fittings on 03 September 2009.
Instrument
TCO No 0932753 was made on 08 January 2010. It declares that those certain 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. 0932753 is taken to have come into force on 03 September 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 Order No. 0932753 under the Customs Act 1901 was enacted in 2010 to address the specific needs of certain industries by providing tariff concessions on particular goods. This legislative instrument allows for a lower rate of customs duty on goods that meet the criteria for a Tariff Concession Order (TCO). The Customs Act 1901 establishes a framework whereby the Chief Executive Officer of Customs can make TCOs, and applications for such concessions are assessed against core criteria to ensure they benefit industries without undermining local production. In this instance, Crane Copper Tube Pty Ltd applied for a TCO for certain tube fittings, and after determining that no substitutable goods were produced in Australia, the CEO issued TCO No. 0932753. This order exempts the specified tube fittings from the general rate of duty, thereby providing a free rate of duty for these goods. The policy objective is to support Australian industries by reducing the cost of imported goods, facilitating their competitiveness in the market.
Scope and Application
The Tariff Concession Instrument No. 0932753, made under the Customs Act 1901, applies to entities seeking a tariff concession order (TCO) for specific goods that are imported into Australia. The Act enables the Chief Executive Officer of Customs to grant a TCO, which allows for a lower rate of customs duty on the specified goods, provided the application meets certain core criteria. Specifically, the Act requires that no substitutable goods are produced in Australia in the ordinary course of business. In this case, the CEO granted a TCO to Crane Copper Tube Pty Ltd for certain tube fittings, which now attract a duty rate of free, as opposed to the general rate of 5%. The geographic reach of the Act is national, as it pertains to goods entering Australia and the concessions apply throughout the Commonwealth.
The Act’s application extends to any person or entity that applies for a TCO, subject to the exclusions and conditions specified in the Act. Any goods specified in section 269SJ of the Act, which details those goods that cannot be subject to a TCO, are excluded from the application of this legislation. The Act allows for the extension of its application through subordinate instruments, such as regulations, which provide further detail on the process and criteria for TCO applications. No liabilities or disadvantages are imposed on any person other than the Commonwealth under this TCO, and importers may benefit from duty refunds for goods imported since the effective date of the TCO.
Key Provisions
The key sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCOs) include section 269F, which allows an application for a TCO to be made by a person to the Chief Executive Officer (CEO) of Customs. If the application is not in respect of goods specified in section 269SJ, the CEO must determine whether it meets the core criteria set out in section 269C. This requires that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269D, 269E, and 269F of the Act.
Entities subject to the Act must ensure that any application for a TCO is not in respect of prohibited goods and that it meets the core criteria. This involves demonstrating that no substitutable goods were produced in Australia on the application day. The CEO has an obligation to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. The CEO must also make a written order if satisfied that the application meets the core criteria, as specified in section 269P(3) of the Act.
The Act does not explicitly outline offences or penalties for breaches concerning TCOs. However, any failure to comply with the provisions of the Customs Act 1901 or associated regulations may result in general penalties as provided under the Act or other applicable legislation. These could include fines or other civil or criminal consequences depending on the nature and severity of the breach. The specifics of any penalties would be determined in the context of the broader legal framework governing customs and related activities.