EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0933394
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.
Stainless Pipe And Fittings applied for a TCO in respect of certain tube or pipe fittings on 08 September 2009.
Instrument
TCO No 0933394 was made on 20 November 2009. It declares that those certain tube or pipe 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. 0933394 is taken to have come into force on 08 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for the imposition of customs duties on imported goods, among other regulatory provisions. One of its key features is the ability to issue Tariff Concession Orders (TCOs) under Part XVA, which allow for the reduction or elimination of customs duties on certain goods, subject to specific criteria. The 2010 Tariff Concession Instrument No. 0933394, which was issued under this framework, addresses the gap by providing tariff concessions for specific tube or pipe fittings, reducing the duty from 5% to free, as the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia. This instrument was introduced to provide relief to businesses importing these goods, thereby supporting the policy objective of facilitating trade and ensuring that Australian industries remain competitive without undue barriers.
Scope and Application
The Tariff Concession Instrument No. 0933394, made under the Customs Act 1901, applies to entities or individuals seeking tariff concessions on certain goods entering Australia. Specifically, the Act allows the Chief Executive Officer of Customs to grant tariff concessions through Tariff Concession Orders (TCOs) for goods that are not substitutable with goods produced in Australia in the ordinary course of business. The application of the Act is triggered by an application under section 269F, which is assessed against the core criteria outlined in sections 269C, 269D, and 269E. If the application is deemed valid, a TCO is issued, as exemplified by Instrument TCO No. 0933394 for certain tube or pipe fittings. This instrument came into effect on 8 September 2009, the date of the application, and provides a duty-free rate for these specified goods, down from the general rate of 5%. The Act's application is confined to the Commonwealth jurisdiction, and it does not affect pre-existing rights or impose new liabilities on persons other than the Commonwealth.
Key Provisions
The Customs Act 1901, specifically under Part XVA, outlines the procedures and criteria for the creation of Tariff Concession Orders (TCOs) (s 269F). These orders, when granted, allow for a lower rate of customs duty on specified goods. A TCO can be applied for by any person, and if the application meets certain criteria, the Chief Executive Officer (CEO) of Customs is mandated to make the order (s 269C). For a TCO to be considered, the CEO must determine that no substitutable goods, which are goods produced in Australia that can be used in the same way as the goods in question, were produced in Australia on the day the application was made (s 269C).
The obligations imposed by the Customs Act on the parties involved are stringent. The CEO must ensure that the application for a TCO does not pertain to goods specified in section 269SJ of the Act, which are ineligible for tariff concessions (s 269SJ). If the CEO is satisfied that the application meets the core criteria, they must proceed to make a written order declaring the goods eligible for a lower rate of duty (s 269P(3)). Additionally, the CEO is required to publish a notice in the Gazette inviting any interested parties to submit their views on whether the TCO should be made (s 269K(1)).
Breaching the conditions or failing to comply with the requirements set out in the Customs Act can lead to various consequences. While specific offences and penalties are not detailed in the explanatory statement, general provisions within the Act may apply, including potential civil and criminal penalties for non-compliance. For example, wilful or negligent contraventions of the Act may result in fines or imprisonment, depending on the severity of the breach. The maximum penalties for such offences can be substantial, reflecting the importance of adhering to the provisions of the Customs Act and the associated TCOs.
In the context of TCO No. 0933394, the application for a tariff concession for certain tube or pipe fittings was successful, and the order was made on 20 November 2009. This order declared that the specified goods are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, effectively setting the duty rate at free, whereas the general rate would be 5% (s 269P(3)). The TCO came into effect on 8 September 2009, the date the application was lodged (s 269S(1)). This means that importers of the affected goods can apply for a refund of duty on goods imported since the commencement date (Regulations, 126(1)(r)). Importantly, the TCO does not impose any liabilities on any person and does not affect any rights as at the date of registration, ensuring that only the Commonwealth benefits from the tariff concession.