EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1043685
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.
Blucher Australia applied for a TCO in respect of certain drainage fittings
on 24 September 2010.
Instrument
TCO No 1043685 was made on 22 December 2010. It declares that those certain drainage 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. 1043685 is taken to have come into force on 24 September 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 Parliament of Australia, introduced a scheme under which Tariff Concession Orders (TCOs) could be made by the Chief Executive Officer of Customs to provide relief on customs duty for certain goods. This was to address the gap in the market where specific goods could not be produced domestically, thereby necessitating their importation. The explanatory statement for Tariff Concession Instrument No. 1043685, issued on 22 December 2010, exemplifies this process. Blucher Australia applied for a TCO for certain drainage fittings on 24 September 2010, and following a review by the CEO, who found that no substitutable goods were produced in Australia, a TCO was granted. This concession effectively lowered the duty rate for these goods from 5% to free, benefiting importers by potentially allowing them to claim refunds for duties paid prior to the TCO's effective date. The instrument was designed to ensure that no existing rights or liabilities were adversely affected by its implementation.
Scope and Application
The Customs Act 1901, as modified by Tariff Concession Order No. 1043685, applies to specific goods, in this case certain drainage fittings, and their importation into Australia. The Act enables the Chief Executive Officer of Customs to grant tariff concessions on goods not produced in Australia, thereby lowering the customs duty on these goods. This order specifically applies to Blucher Australia's application for tariff concession on certain drainage fittings, resulting in a reduction of duty from 5% to free. The application of the Act is limited to the scope of goods subject to the tariff concession, and it does not extend to any other goods or entities unless similarly applied for and approved. The geographic reach of this Act is national, applying throughout Australia as a Commonwealth Act. There are no stated exclusions or exemptions within the scope of this particular TCO, and it operates under the specified terms of the Customs Act 1901 and the Customs Tariff Act 1995. The application of this legislation may be further defined or extended through subordinate instruments, though none are indicated in this specific context.
Key Provisions
The Tariff Concession Order (TCO) No. 1043685, made under the Customs Act 1901, provides specific tariff concessions for certain drainage fittings, as detailed in section 269F. When Blucher Australia applied for a TCO on 24 September 2010, the CEO of Customs evaluated the application to determine if it met the core criteria specified in section 269C. The CEO was required to ascertain that no substitutable goods were produced in Australia on the day the application was lodged, a definition which is further clarified in sections 269D, 269E, and 269F of the Act. Once the CEO confirmed that the application met these criteria, they issued a written TCO order under section 269P(3), declaring that the specified drainage fittings were subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, thereby granting a duty-free status to these goods.
The TCO imposes certain obligations on both the applicant and the CEO. For the applicant, it involves submitting a detailed application to the CEO, ensuring it complies with the criteria outlined in the Act. For the CEO, the obligations include evaluating the application against the specified criteria, publishing a notice in the Gazette inviting submissions from any interested parties, and issuing the TCO if the criteria are satisfied. The CEO must also ensure that the TCO does not disadvantage any person or impose liabilities on anyone in respect of actions taken before the TCO's registration, as stipulated in subsection 269S(1) and paragraph 126(1)(r) of the Regulations.
Failure to comply with the requirements of the Customs Act 1901 or the terms of the TCO may result in various consequences. While the explanatory statement does not detail specific offences, penalties, or civil/criminal consequences for breaches of the TCO, it is implied that non-compliance with the Act’s provisions could lead to enforcement actions. Such actions might include legal proceedings, fines, or other penalties as prescribed by the relevant legislation. The maximum penalties for breaches of the Customs Act 1901 are substantial, with potential fines and imprisonment depending on the severity of the offence. However, the specific details of these penalties are not elaborated upon in the explanatory statement.