EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1025390
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.
The Trustee for Como Glasshouse Unit Trust applied for a TCO in respect of certain multilayered welded steel pipe fittings on 07 June 2010.
Instrument
TCO No 1025390 was made on 30 August 2010. It declares that those certain multilayered welded steel 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. 1025390 is taken to have come into force on 07 June 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 to introduce a scheme under which Tariff Concession Orders (TCOs) could be made by the Chief Executive Officer of Customs (the CEO). This was enacted to provide a mechanism for the application of lower rates of customs duty on specified goods, addressing the need to support industries by reducing the cost of importing certain goods. The Parliament of Australia established this legislative framework to facilitate economic benefits and industrial support. The policy objective behind the introduction of TCOs was to ensure that certain goods, which are not produced domestically or for which no suitable domestic alternatives exist, could be imported at a reduced duty rate, thereby aiding businesses and consumers by lowering costs and potentially increasing the competitiveness of domestic industries.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the process of Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs (CEO) can apply lower rates of customs duty on certain goods. A person may apply to the CEO for a TCO in respect of goods, provided the goods are not specified in section 269SJ, which lists items ineligible for a TCO. If the CEO determines that the application meets the core criteria under section 269C, which includes the absence of substitutable goods produced in Australia at the time of application, a written TCO is issued. This instrument applies to the specific goods identified in the application, and its scope extends to the entire Commonwealth. For instance, TCO No. 1025390 pertains to certain multilayered welded steel pipe fittings, lowering their duty rate from 5% to free. The TCO process involves public consultation where submissions can be made against the proposed concession, though in this case, none were received. The TCO takes effect from the date the application is lodged, benefiting importers who can apply for duty refunds on imports from that date forward. Importantly, the TCO does not retroactively disadvantage any person or impose new liabilities.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1025390 under the Customs Act 1901 (section 269F) allow for the Chief Executive Officer of Customs (CEO) to make a Tariff Concession Order (TCO) for specific goods, reducing their customs duty rate. This concession applies if the goods are not produced in Australia and no substitutable goods exist (section 269C). The CEO must also ensure that the goods do not fall under the restricted list outlined in section 269SJ of the Act. If these criteria are met, the CEO issues a written order specifying the new tariff rate for the goods (section 269P(3)).
The Act imposes certain obligations on the parties involved. For example, applicants for a TCO must ensure their application complies with the core criteria (section 269C) and any other specified conditions. The CEO is obligated to assess the application's validity and make a decision based on the criteria. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties if they believe the TCO should not proceed (subsection 269K(1)). In this case, no submissions were received, leading to the issuance of TCO No. 1025390.
In terms of consequences for non-compliance or breach, the Act does not explicitly detail specific offences or penalties related to the TCO process itself. However, general compliance with the Customs Act 1901 and associated regulations can lead to civil or criminal penalties if violations occur. For instance, failure to correctly apply for or misuse of a TCO might result in penalties under broader customs legislation. The specific penalties would depend on the nature and severity of the breach, but they could include fines or other sanctions as stipulated by the relevant customs laws.
The TCO No. 1025390 does not disadvantage any existing rights of persons other than the Commonwealth and does not impose new liabilities on anyone (subsection 269S(1)). Importers of the specified goods can benefit from this order by applying for a refund of duty paid on imports since the effective date of the TCO, which is the day the application was lodged (paragraph 126(1)(r) of the Regulations). This means that while the TCO provides tariff relief, it does not retroactively affect any duties already paid before its effective date.