EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1044234
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.
A Bending Company applied for a TCO in respect of certain pipe and or tube fittings on 29 September 2010.
Instrument
TCO No 1044234 was made on 23 December 2010. It declares that those certain pipe and or tube 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. 1044234 is taken to have come into force on 29 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, provides a framework for the administration of customs duties and includes provisions for tariff concession orders (TCOs) under Part XVA. These TCOs allow for a lower rate of customs duty on specified goods, provided certain criteria are met, such as the absence of substitutable goods produced in Australia. The Tariff Concession Instrument No. 1044234, made under this Act, was introduced to address the specific need of The Bending Company, which sought reduced duty rates on certain pipe and tube fittings. The instrument, which came into force on 29 September 2010, was made after the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, thus meeting the core criteria set out in the Act. The instrument grants a free rate of duty on these fittings, which contrasts with the general rate of 5%, and ensures that the rights of importers are beneficially affected without imposing any new liabilities.
Scope and Application
The Tariff Concession Instrument No. 1044234, established under Part XVA of the Customs Act 1901, applies to goods that are the subject of a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs. The instrument specifically pertains to certain pipe and tube fittings for which A Bending Company applied for a TCO on 29 September 2010. The Act applies to any person or entity that imports or intends to import these specific goods into Australia, allowing them to benefit from a reduced rate of customs duty as outlined in the TCO. The Act operates within the Commonwealth jurisdiction and its application is not restricted to any particular state, territory, or national boundary, thereby encompassing all imports into Australia. The TCO exempts the specified goods from the general rate of duty, which is 5%, and imposes a free rate instead, provided that no substitutable goods are produced in Australia. There are no stated exclusions, exemptions, or thresholds beyond the core criteria outlined in the Act. The application and effect of the TCO are governed by the Customs Act 1901 and further detailed in the Customs Tariff Act 1995, and any subsequent subordinate instruments that may extend or clarify the application of the Act.
Key Provisions
The Customs Act 1901, specifically under Part XVA, details the process for Tariff Concession Orders (TCOs) which reduce the customs duty on certain goods. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided they are not specified in section 269SJ. If the application is deemed valid and meets the core criteria outlined in section 269C, the CEO must make a written TCO. For instance, A Bending Company successfully applied for a TCO for certain pipe and tube fittings, which now have a duty rate of free, down from the general rate of 5% (Section 269P(3)).
The Act imposes several obligations on the parties involved. The CEO must ensure that the application is valid and meets the criteria, particularly that no substitutable goods are produced in Australia as per section 269C. The CEO must also publish a notice in the Gazette inviting any interested parties to object to the TCO, although no submissions were received for this case (subsection 269K(1)). The TCO becomes effective on the date the application was lodged (subsection 269S(1)), thereby impacting the rights of importers beneficially by allowing them to apply for duty refunds on goods imported since the TCO's effective date (paragraph 126(1)(r) of the Regulations).
Any breaches of the provisions under the Customs Act 1901, particularly concerning the improper application or misuse of a TCO, can lead to civil or criminal consequences. The penalties can include fines and, in more severe cases, imprisonment. For example, knowingly making a false statement in an application for a TCO could result in penalties as outlined in the Act. The specific maximum penalties are detailed in other sections of the Act, although the explanatory statement does not provide specific figures for the TCO in question. Nonetheless, it is clear that compliance with the Act is crucial to avoid legal repercussions.