EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1035607
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.
Kembla Watertech applied for a TCO in respect of certain pipe lining and sealing system on 03 August 2010.
Instrument
TCO No 1035607 was made on 01 November 2010. It declares that those certain pipe lining and sealing system 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. 1035607 is taken to have come into force on 03 August 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 enacted by the Parliament of Australia to regulate the importation and exportation of goods and facilitate trade. The Act provides a framework for the administration of customs and excise duties, including the ability for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) under section 269C. These orders allow for reduced customs duty rates on certain goods, provided they meet specific criteria, such as the absence of substitutable goods produced in Australia. The explanatory statement for Tariff Concession Instrument No. 1035607 clarifies the application of this scheme to specific goods, in this case, certain pipe lining and sealing systems, where a concession has been granted following an application by Kembla Watertech. The instrument was introduced to ensure that the application process, including the consideration of public submissions and the effective date of the concession, aligns with the legislative requirements and policy objectives of the Customs Act 1901.
Scope and Application
The Tariff Concession Instrument No. 1035607, made under the Customs Act 1901, pertains specifically to the application of tariff concessions to certain pipe lining and sealing systems. This instrument applies to the particular goods specified in the instrument, which are identified as being subject to a tariff concession order (TCO) made by the Chief Executive Officer of Customs (CEO). The instrument applies to these goods only and is effective from the date the application was lodged, which is 03 August 2010. The TCO does not apply to any other goods or entities outside the scope of this specific instrument. The instrument affects the importation of these goods by granting them a rate of duty of free, as opposed to the general rate of duty of 5%. The instrument operates within the Commonwealth jurisdiction, as it is made under an Act of the Commonwealth of Australia. There are no stated exclusions, exemptions, or thresholds within this particular instrument; however, it should be noted that the application process itself includes checks to ensure that the goods in question are not substitutable goods produced in Australia. The instrument does not impose any liabilities or disadvantage any person other than the Commonwealth and does not affect the rights of any person as at the date of registration in relation to anything done or omitted to be done prior to the registration.
Key Provisions
The main operative sections of this legislation revolve around the making of Tariff Concession Orders (TCOs) under Part XVA of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of certain goods. Once an application is accepted as valid, the CEO must decide whether it meets the core criteria set out in sections 269C and 269P of the Act. Specifically, a TCO application meets the core criteria if no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). If the CEO is satisfied that the application meets these criteria, they are required to make a written order (a TCO) declaring that the goods are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995 (section 269P(3)).
The Act imposes several obligations on the parties it governs. Firstly, any person wishing to apply for a TCO must ensure their application is valid and meets the core criteria specified in section 269C. The CEO is obligated to assess the application against these criteria and, if satisfied, must proceed to make the TCO. Additionally, the CEO is required to publish a notice in the Gazette inviting any interested parties to submit objections or reasons why the TCO should not be made (subsection 269K(1)). If no objections are received, the CEO must proceed to issue the TCO. Kembla Watertech, in this case, applied for a TCO on 03 August 2010, and upon meeting the criteria, the CEO issued TCO No. 1035607 on 01 November 2010.
The Act also outlines specific consequences and penalties for breaches. Although the explanatory statement does not detail specific offences or penalties, it is implied that any failure to comply with the provisions for TCO applications could lead to legal consequences. For example, if a TCO is issued improperly, it could be subject to judicial review or revocation, leading to potential civil or administrative penalties. The rights of importers are protected, and they can apply for a refund of duty on goods imported since the effective date of the TCO under paragraph 126(1)(r) of the Regulations. The legislation ensures that the rights of persons other than the Commonwealth are not adversely affected by the issuance of a TCO.
In summary, the legislation establishes a structured process for the application and approval of Tariff Concession Orders, ensuring that the interests of all parties are considered and protected. The CEO of Customs has a pivotal role in assessing applications and making decisions based on the criteria set out in the Act, with clear mechanisms in place for consultation and objection. The rights of importers are safeguarded, and the effective date of the TCO ensures that no one is disadvantaged by its issuance.