EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1046729
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 Pty Ltd applied for a TCO in respect of certain tube fittings on 18 October 2010.
Instrument
TCO No 1046729 was made on 13 January 2011. It declares that those certain 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. 1046729 is taken to have come into force on 18 October 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 Tariff Concession Instrument No. 1046729, enacted in 2011, is a legislative instrument under the Customs Act 1901, designed to facilitate tariff concessions for specific goods. This instrument was introduced to address the need for a streamlined process to reduce customs duties on imported goods, thereby promoting trade and economic benefits by making certain goods more affordable. The instrument was enacted by the Chief Executive Officer of Customs following an application from Blucher Australia Pty Ltd for tariff concessions on certain tube fittings, ensuring these goods would benefit from a duty-free rate as no substitutable goods were being produced in Australia. The objective of this instrument aligns with the broader policy goal of enhancing the competitiveness of Australian industries by providing tariff relief on specific imported goods, thereby supporting the economic interests of businesses and consumers.
Scope and Application
The Customs Act 1901 applies to persons or entities who are involved in the importation of goods into Australia, specifically in relation to the application for Tariff Concession Orders (TCOs). These orders are relevant to the application of customs duty rates on specific goods and are administered by the Chief Executive Officer of Customs. The Act applies to all goods unless they are specifically excluded under section 269SJ of the Act. The geographic reach of the Act is national, as it applies across the Commonwealth of Australia, and its provisions extend to the entire country. The Act's application may also be influenced by subordinate instruments, which can provide further detail or clarification on certain aspects of the legislation. TCO No 1046729, for example, provides a specific instance where the Act's application has been formalised in relation to certain tube fittings, allowing for a concession on the duty rate for these goods. This instrument highlights how the Act can be used to provide targeted relief on customs duties for particular goods, provided the core criteria under the Act are met.
Key Provisions
The main sections of the Tariff Concession Instrument No. 1046729 (subsection 269P(3)) under the Customs Act 1901 require the Chief Executive Officer (CEO) of Customs to make a written order when satisfied that a Tariff Concession Order (TCO) application meets the core criteria. Specifically, section 269C requires the CEO to confirm that no substitutable goods were produced in Australia on the day the application was lodged. Section 269B defines key terms such as 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods'. The TCO instrument itself, in this case TCO No. 1046729, declares that certain tube fittings are subject to a lower rate of customs duty, with the general rate being 5% and the TCO rate being free.
The Act imposes several obligations on the parties involved. The CEO must ensure that the TCO application meets the core criteria and that no substitutable goods were produced in Australia on the application date. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties, although in this instance, no submissions were received (subsection 269K(1)). The Act also requires the CEO to make the TCO as soon as the application is deemed valid, with the effective date being the day the application was lodged (subsection 269S(1)). Importers of the affected goods benefit from the TCO by potentially applying for a refund of duty on goods imported since the effective date of the TCO.
Any breach of the requirements under the Customs Act 1901 can lead to civil or criminal penalties, though specific penalties are not detailed in the explanatory statement. The Act allows for various offences related to the importation of goods, including the importation of goods without the required duty paid or the provision of false information. Penalties can include fines, imprisonment, or both, depending on the severity of the offence. For example, under section 233 of the Act, importing goods without paying the required duty can result in a fine of up to $22,000 or imprisonment for up to five years, or both. However, the explanatory statement does not provide specific details on the penalties for breaches related to TCO applications.