EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1009883
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.
Blucher Australia applied for a TCO in respect of certain pipe and tube fittings on 25 February 2010.
Instrument
TCO No 1009883 was made on 14 May 2010. It declares that those certain pipe and 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. 1009883 is taken to have come into force on 25 February 2010.
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 amended by the Tariff Concession Instrument No. 1009883, enacted in 2010, to address the need for tariff concessions on specific imported goods. This instrument empowers the Chief Executive Officer of Customs to provide tariff concessions on goods, thereby reducing the rate of customs duty for those goods if certain criteria are met. Specifically, the instrument aims to provide relief by offering a lower rate of duty for goods that are not substitutable by goods produced in Australia, thereby encouraging the importation of these goods without placing a burden on local producers. The policy objective, as stated in the Act, is to facilitate trade and economic efficiency by reducing the cost of imported goods for consumers and businesses.
The instrument was developed and enacted by the Parliament of Australia to streamline the process of applying for tariff concessions and to provide clear guidelines for the Chief Executive Officer of Customs in determining applications. By providing tariff concessions, the instrument seeks to support industries that rely on the importation of specific goods, ensuring they can operate more competitively in the domestic market without being unduly disadvantaged by high customs duties.
Scope and Application
The Tariff Concession Instrument No. 1009883, under the Customs Act 1901, applies to individuals or entities who have applied for tariff concessions on specific goods, in this case, certain pipe and tube fittings. The application process is overseen by the Chief Executive Officer of Customs, who determines whether the application meets the core criteria stipulated in the Act. The geographic and jurisdictional reach of this legislation is national, as it pertains to the Commonwealth of Australia. Notably, the application of this Act is restricted by certain exclusions; for instance, it does not apply to goods specified in section 269SJ of the Act, which outlines those goods that cannot be subject to a Tariff Concession Order (TCO). The TCO provides a lower rate of customs duty for specified goods, in this instance, exempting them from the general 5% duty rate. The commencement date of this TCO is aligned with the date of the application, 25 February 2010, and it does not impose any liabilities or disadvantage any person other than the Commonwealth, thereby benefiting importers who can apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1009883 under the Customs Act 1901 (section 269P(3)) require the Chief Executive Officer of Customs (CEO) to make a written order (Tariff Concession Order or TCO) if they are satisfied that the application for tariff concession meets the core criteria. Specifically, this means that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). The TCO declares that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, with a rate of duty of free, rather than the general rate of 5% (section 269P(3)). The instrument, TCO No. 1009883, was made on 14 May 2010, and it applies to certain pipe and tube fittings.
The Customs Act 1901 imposes several obligations and requirements on the parties it governs. Firstly, any person may apply to the CEO for a TCO in respect of goods (section 269F). The CEO must then assess whether the application meets the core criteria, specifically ensuring no substitutable goods were produced in Australia on the day of the application (section 269C). If the CEO is satisfied that the application meets these criteria, they must make a written TCO (section 269P(3)). Furthermore, as soon as practicable after accepting a TCO application as valid, the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (subsection 269K(1)). If no submissions are received, the TCO can proceed as planned.
Failure to comply with the provisions of the Customs Act 1901 and the associated TCO may result in various civil and criminal consequences. The Act does not specify particular offences for breaching the TCO provisions, but general penalties for contravening the Customs Act can include fines and imprisonment. For instance, under section 230A, a person who knowingly or recklessly makes a false statement or representation in relation to any matter relevant to the Act can be fined up to 10,000 penalty units or imprisoned for up to five years, or both. Additionally, under section 231A, a person who is negligent in relation to any matter relevant to the Act can be fined up to 2,200 penalty units. The maximum penalties reflect the severity of the breach and are intended to deter non-compliance.
In summary, Tariff Concession Instrument No. 1009883 allows for a lower rate of customs duty on certain pipe and tube fittings, provided that the CEO is satisfied that no substitutable goods were produced in Australia on the date of the application. The Act requires applicants to meet core criteria and mandates the CEO to make a written TCO if these criteria are met. Non-compliance with the Act’s provisions may lead to significant penalties, including fines and imprisonment, depending on the nature and severity of the breach.