EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1025391
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 pipes on 07 June 2010.
Instrument
TCO No 1025391 was made on 30 August 2010. It declares that those certain pipes 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. 1025391 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, enacted by the Australian Parliament, establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders allow for a reduced rate of customs duty on specified goods. The problem this legislation addresses is the need for flexibility in tariff rates to accommodate specific circumstances, such as the import of goods that are not produced domestically or are unique in nature. The explanatory statement for Tariff Concession Instrument No. 1025391, made under this Act, outlines the process and criteria for issuing a TCO, including the requirement that no substitutable goods are produced in Australia. The policy objective is to provide tariff concessions where appropriate, thereby facilitating trade and supporting economic activities without disadvantaging existing rights or imposing new liabilities. The instrument in question was made in response to an application from the Trustee for Como Glasshouse Unit Trust for certain pipes, leading to a tariff concession that reduces the duty on these goods from the general rate of 5% to free.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which apply to specific goods and reduce the customs duty on them. The Act applies to any person who can demonstrate that the goods they seek a concession for are not substitutable by goods produced in Australia, and that no such substitutable goods are produced in the ordinary course of business in Australia. This process ensures that local industries are not unfairly disadvantaged by the importation of similar goods. The TCO mechanism operates within the national jurisdiction of Australia and is applicable to all goods, regardless of the state or territory in which they are imported. The application process involves an invitation for public submissions, although in the case of Tariff Concession Instrument No. 1025391, no submissions were received. The TCO comes into effect on the date the application is lodged, and it does not affect the rights of any person as they stood before the date of registration, ensuring that there are no retroactive liabilities or disadvantages imposed on any party other than the Commonwealth.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 1025391 under the Customs Act 1901, relate to the establishment and application of Tariff Concession Orders (TCOs) (s 269F). This instrument was made to address an application by the Trustee for Como Glasshouse Unit Trust for a TCO concerning certain pipes, which are now subject to a lower rate of customs duty. Under section 269C, the CEO must assess whether an application meets the core criteria, specifically if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (s 269P(3)). If the CEO is satisfied, they must issue a written order declaring that the goods in question are subject to a specified item in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by this Act on the parties involved, particularly the CEO, are to ensure that any TCO application is assessed against the core criteria (s 269C). This includes verifying that no substitutable goods were produced in Australia at the time of application. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who might have reasons against the making of the TCO (s 269K(1)). In this case, no submissions were received. The Act also mandates that once a TCO is issued, the rights of importers will be beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO came into effect (Reg 126(1)(r)).
Any breach of the provisions outlined in the Customs Act 1901 could lead to significant consequences. Although the explanatory statement does not explicitly detail offences, penalties, or civil/criminal consequences for breach, it is understood that failure to comply with the requirements for TCO applications could result in legal action. The Customs Act generally includes provisions for penalties for non-compliance, which can include fines and imprisonment for serious breaches. Given that the TCO does not affect the rights of any person as at the date of registration to disadvantage them or impose liabilities for actions taken before the registration date, it is clear that the Act aims to protect both the applicants and other stakeholders from unfair disadvantages.