EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1037312
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.
Onesteel Trading applied for a TCO in respect of certain line pipe on 13 August 2010.
Instrument
TCO No 1037312 was made on 08 November 2010. It declares that those certain line pipe 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. 1037312 is taken to have come into force on 13 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 and provides a framework for the administration of customs duties, including the establishment of a scheme for Tariff Concession Orders (TCOs). The Act was introduced to address the need for a mechanism that allows for reduced customs duties on specific goods, thereby facilitating trade and potentially benefiting importers. Pursuant to the Customs Act, the Chief Executive Officer of Customs is empowered to make a TCO if certain criteria are met, such as the absence of substitutable goods produced in Australia. This legislative instrument, Tariff Concession Instrument No. 1037312, was introduced to provide tariff concessions for certain line pipes, with the objective of ensuring that the application of these concessions does not disadvantage any party and allows for the refund of duties paid on imports of the specified goods since the effective date of the concession.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders apply a lower rate of customs duty to specified goods, contingent on meeting core criteria outlined in the Act. The application process involves a submission by any person or entity to the CEO, who must ascertain that the goods in question are not among those ineligible for a TCO as specified in section 269SJ. For a TCO to be granted, the CEO must be satisfied that no substitutable goods were produced in Australia at the time of application, as defined in section 269C. The scope of this legislation encompasses all entities and persons involved in the import of goods subject to a TCO, as well as the industries and transactions associated with such imports. The application of the Act is national, operating under Commonwealth jurisdiction. The Act allows for the creation of subordinate instruments to extend or clarify its application, though no exclusions, exemptions, or specific thresholds are mentioned within the text provided. The commencement of TCO No. 1037312, for example, is tied to the date the application was lodged, ensuring that the rights of importers are protected and no new liabilities are imposed on them.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1037312 (the Instrument) under the Customs Act 1901 (the Act) include sections 269C, 269B, 269D, 269E, 269F, 269P, and 269S. These sections outline the process for applying for a Tariff Concession Order (TCO) and the criteria that must be met for such an order to be made. Specifically, section 269F allows a person to apply for a TCO in respect of goods, and if the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria set out in section 269C, a written order declaring that the goods are subject to a lower rate of customs duty must be made. This process is further clarified by sections 269B and 269D, which define key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods." The Instrument itself, TCO No. 1037312, declares that certain line pipe are subject to a lower rate of customs duty as of 13 August 2010, the date the application was lodged.
The Act imposes several obligations and requirements on the parties and entities it governs. Most notably, section 269K(1) requires the CEO to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who considers there are reasons why the TCO should not be made to lodge a submission. The CEO must also ensure that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, as per section 269C. If the CEO is satisfied that the application meets these criteria, a TCO must be made under section 269P(3). The CEO is also required to ensure that the TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person in respect of anything done or omitted to be done before the date of registration, as per section 269S(1).
The Act does not specify any offences, penalties, or civil/criminal consequences for breach of the provisions related to TCOs. However, the process for making a TCO is stringent, and any failure by the CEO to follow the prescribed steps could potentially lead to legal challenges. The CEO’s decision to make a TCO is subject to review and appeal, and any failure to follow the statutory requirements could be contested in court. While the Act does not explicitly state maximum penalties for non-compliance, any breach of statutory duties by the CEO could result in legal action being taken to ensure compliance with the Act’s provisions.