EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1047333
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.
Bluescope Distribution applied for a TCO in respect of certain tube fittings on 21 October 2010.
Instrument
TCO No 1047333 was made on 10 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. 1047333 is taken to have come into force on 21 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 Customs Act 1901, enacted by the Australian Parliament, establishes a framework for tariff concession orders (TCOs) through Part XVA. The Act aims to address the issue of providing tariff concessions on certain goods by enabling the Chief Executive Officer of Customs to apply reduced customs duty rates on goods not produced in Australia and that have no substitutable goods domestically. Specifically, section 269F of the Act allows for applications to be made for TCOs, subject to the CEO's determination that the application meets core criteria such as the absence of substitutable goods produced in Australia. The policy objective of the Act is to facilitate the importation of goods that are not domestically produced, thereby potentially lowering costs and encouraging trade. Following an application by Bluescope Distribution, Tariff Concession Order No. 1047333 was made on 10 January 2011, granting free duty on certain tube fittings, effective from 21 October 2010, the date the application was lodged.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCO) provisions, applies to any individual or entity seeking a concession on customs duty for specific goods. The Act specifically addresses the circumstances under which the Chief Executive Officer of Customs (CEO) may grant a TCO, particularly when the goods in question are not of a type listed in section 269SJ, which precludes certain goods from concession eligibility. The scope of the Act extends to any goods where no substitutable goods are produced in Australia, as per the criteria outlined in section 269C. The geographic reach of the Act is national, affecting all importers across Australia. Notably, the Act does not apply to goods specified in section 269SJ, and any TCO does not retroactively affect the rights of any person other than the Commonwealth. Subordinate instruments may further refine the application of these concessions, although the primary Act sets out the foundational criteria and processes for TCO applications.
Key Provisions
The Tariff Concession Instrument No. 1047333, under the Customs Act 1901, introduces a specific concession on customs duties for certain goods. Section 269F of the Act allows a person to apply for a Tariff Concession Order (TCO) in relation to goods, provided these goods are not excluded under section 269SJ. The primary criterion for the Chief Executive Officer of Customs (CEO) to consider, as outlined in section 269C, is whether there are no substitutable goods produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P(3) mandates that if the CEO is satisfied that the application meets the core criteria, they must issue a written order, a TCO, declaring the goods subject to a specified rate of duty in Schedule 4 to the Customs Tariff Act 1995.
Entities governed by the Act, particularly those applying for a TCO, must ensure their applications meet the core criteria. This involves demonstrating that no substitutable goods are produced in Australia. The definitions provided in sections 269D and 269E clarify terms such as 'goods produced in Australia' and 'ordinary course of business', while section 269E defines 'substitutable goods'. Additionally, section 269K(1) requires the CEO to publish a notice in the Gazette inviting any interested party to submit objections if they believe the TCO should not be made. In this instance, the CEO did not receive any submissions.
Failing to comply with the requirements or making a false statement in an application under section 269G of the Act could result in legal consequences. Although specific offences and penalties are not detailed in the explanatory statement, general provisions under the Customs Act 1901 may apply. Penalties for breaches can include fines and, in serious cases, imprisonment. The Act does not impose any liabilities on individuals or entities for actions taken prior to the TCO's effective date, ensuring that the rights of the Commonwealth are not adversely affected.