EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1015482
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 Pty Ltd applied for a TCO in respect of certain tube fittings on 31 March 2010.
Instrument
TCO No 1015482 was made on 09 July 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. 1015482 is taken to have come into force on 31 March 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 Tariff Concession Instrument No. 1015482, enacted in 2010, to provide for tariff concessions on certain goods, specifically certain tube fittings. This legislative instrument was introduced to address the need for tariff relief on imported goods that are not produced domestically and for which there are no suitable substitutes available in Australia. The instrument empowers the Chief Executive Officer of Customs to grant tariff concessions based on specific criteria, ensuring that such concessions do not undermine domestic production. The policy objective is to support industries by reducing the duty on imported goods that are not domestically produced, thereby potentially lowering costs for businesses and consumers.
The instrument was enacted by the Australian Government, specifically under the authority granted by the Customs Act 1901, allowing for the creation of Tariff Concession Orders (TCOs) to provide relief from customs duties. The process involves an application to the CEO, followed by a decision based on whether the goods meet the core criteria set out in the Act, such as the absence of substitutable goods produced in Australia. In this instance, Blucher Australia Pty Ltd applied for and was granted a TCO for certain tube fittings, resulting in a duty rate of free instead of the general 5% rate. The instrument came into effect on the date the application was lodged, 31 March 2010, and does not impose any liabilities on persons other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 1015482 under the Customs Act 1901 applies to individuals or entities seeking a reduction in customs duty on specific goods, namely certain tube fittings in this instance. This legislation is designed to facilitate applications from those who can demonstrate that no substitutable goods are produced in Australia, thereby meeting the core criteria for a Tariff Concession Order (TCO). The Act applies to the Chief Executive Officer of Customs (CEO) who is responsible for deciding whether an application meets these criteria. Once satisfied, the CEO issues a TCO that effectively reduces or eliminates the duty on the specified goods. The instrument has a national reach and applies to all parties involved in the import of the specified goods within Australia. However, the Act excludes certain goods as outlined in section 269SJ, which cannot be subject to a TCO. The application of this Act may be extended or restricted through subordinate instruments, although in this particular case, no such extensions or restrictions have been noted.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1015482 under the Customs Act 1901 (the Act) are sections 269C, 269F, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of goods. If the application meets the core criteria as defined in section 269C, and no submissions are received opposing the TCO, the CEO must make a written order declaring that the goods in question are subject to a prescribed rate of customs duty specified in the order. In this instance, the TCO declares that certain tube fittings are subject to a rate of duty of free, as no substitutable goods were produced in Australia on the day the application was lodged.
The obligations imposed by this legislation on the parties involved are primarily on the CEO of Customs, who must assess applications for TCOs against the criteria outlined in the Act. The CEO must ensure that any applications not concerning prohibited goods (as per section 269SJ) are assessed to determine if they meet the core criteria. If the application is deemed suitable, the CEO must make a written order as per section 269P(3). Additionally, the CEO is required under section 269K(1) to publish a notice in the Gazette inviting submissions from any interested parties. In this case, the CEO published a notice but did not receive any submissions opposing the TCO.
There are no specific offences or penalties outlined in this instrument for failing to comply with the requirements of the TCO. However, any breach of the Customs Act 1901 or related regulations could result in criminal or civil penalties, depending on the nature and severity of the breach. The Customs Act includes provisions for penalties such as fines and imprisonment for offences such as false statements or fraudulent activities in relation to customs duties. The maximum penalties for such offences can vary, but for serious breaches, they may include substantial fines and lengthy periods of imprisonment.
In summary, the Tariff Concession Instrument No. 1015482 provides a mechanism for the CEO of Customs to grant tariff concessions on certain goods if specific criteria are met. The CEO is obligated to assess applications, consult with interested parties, and publish notices in the Gazette. Failure to comply with the broader provisions of the Customs Act 1901 could result in penalties, including fines and imprisonment, though the specific penalties for breaches related to this TCO are not detailed in the instrument itself.