EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1029727
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 Australia Pty Ltd applied for a TCO in respect of certain tubes on 01 July 2010.
Instrument
TCO No 1029727 was made on 29 September 2010. It declares that those certain tubes 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. 1029727 is taken to have come into force on 01 July 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 Commonwealth Parliament, provides for the administration of customs duties and the regulation of imports and exports. One of its key components is the scheme for Tariff Concession Orders (TCOs), which allows for the reduction or exemption of customs duties on certain goods under specific conditions. The primary objective of this scheme is to facilitate trade by providing tariff relief where appropriate, thereby encouraging economic efficiency and competitiveness. The Explanatory Statement for Tariff Concession Instrument No. 1029727, made in 2010, exemplifies this purpose by addressing the specific application of Stainless Pipe and Fittings Australia Pty Ltd for a TCO on certain tubes. The instrument declares that these tubes are subject to a zero rate of duty, as no substitutable goods were produced in Australia, thereby alleviating the financial burden on the importer and potentially stimulating trade in these goods.
Scope and Application
The Tariff Concession Instrument No. 1029727, made under the Customs Act 1901, applies to certain tubes for which Stainless Pipe and Fittings Australia Pty Ltd applied for a Tariff Concession Order (TCO). The Act applies to any person who applies for a TCO in respect of goods that are not specified in section 269SJ of the Act, which excludes certain goods from TCO eligibility. The application process involves the Chief Executive Officer of Customs determining whether the application meets the core criteria, which include the condition that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. This TCO is effective as of 1 July 2010, the date the application was submitted, and it does not impose any liabilities or disadvantage any person other than the Commonwealth. Importantly, the rights of importers are positively affected, allowing them to apply for a refund of duty on goods imported from the effective date of the TCO. The geographical reach of this legislation is nationwide, applying across Australia as it falls under the Commonwealth's authority.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 1029727 under the Customs Act 1901, focus on the procedure and criteria for making Tariff Concession Orders (TCOs) and the concessions they provide. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning specific goods. Section 269C stipulates that for an application to meet the core criteria, it must be lodged on a day when no substitutable goods are produced in Australia in the ordinary course of business. Section 269P(3) mandates that if the CEO is satisfied that the application meets the core criteria, they must issue a written order (TCO), specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applicable to the goods.
The obligations and requirements imposed by the Act on the parties governed by it include the necessity for applicants to ensure their TCO applications meet the core criteria, as defined by the Act. The CEO is required to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. Additionally, the CEO must decide whether the application meets the core criteria, which involves assessing whether no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, they must issue a written TCO.
Under the Customs Act 1901, breaches of the requirements or obligations imposed by the Act may result in civil or criminal consequences. However, the explanatory statement does not detail specific offences or penalties associated with breaches of the TCO provisions. The Act generally provides for various penalties for breaches, which may include fines or imprisonment, depending on the nature and severity of the breach. The maximum penalties are not specified in the explanatory statement but would be detailed in the relevant sections of the Customs Act 1901 and associated regulations. The implications for non-compliance could include financial penalties, legal action, or other consequences as determined by the relevant authorities.