EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1047741
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 tubes or pipes on 26 October 2010.
Instrument
TCO No 1047741 was made on 13 January 2011. It declares that those certain tubes or pipes 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. 1047741 is taken to have come into force on 26 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, established a framework for the application of customs duty, including the possibility of tariff concessions for certain goods. This legislation was introduced to address the need for a streamlined process to reduce customs duty on specific imported goods, thereby facilitating trade and encouraging economic growth. In line with these objectives, Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs, provided that the application meets the core criteria outlined in the Act, particularly that no substitutable goods are produced in Australia. The explanatory statement for Tariff Concession Instrument No. 1047741, made under this Act, details the application of Blucher Australia for a TCO concerning certain tubes or pipes, which was granted on 13 January 2011 after it was determined that no substitutable goods were produced in Australia. The concession effectively reduced the duty on these goods from 5% to free, with the order coming into effect on the date the application was lodged, 26 October 2010. The process included public consultation, which in this instance did not elicit any submissions opposing the concession.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCO), applies to individuals and entities seeking a concession on customs duty for specific imported goods. The Act allows the Chief Executive Officer of Customs to grant these concessions provided the goods are not specified in section 269SJ, which excludes certain items from eligibility. The application of a TCO is contingent on the core criteria outlined in section 269C, which necessitates that no substitutable goods are produced in Australia at the time of application. The geographic reach of this legislation is national, as it pertains to customs duties across Australia. Exclusions are clearly defined under section 269SJ, and the application process may be extended through subordinate instruments, such as the Customs Tariff Act 1995, which details the specific tariff items applicable to goods under a TCO. The TCO does not retroactively affect the rights of any party other than the Commonwealth and does not impose any new liabilities on individuals or entities.
Key Provisions
The Customs Act 1901, specifically in Part XVA, establishes the framework for Tariff Concession Orders (TCOs) (s 269F). The CEO of Customs has the authority to make these orders, which apply lower rates of customs duty to specified goods. For instance, TCO No. 1047741, made on 13 January 2011, concerns certain tubes or pipes, which now attract a duty rate of zero percent instead of the general rate of 5% (s 269P(3)).
When an application for a TCO is submitted, the CEO must determine if it meets the core criteria outlined in section 269C of the Act. The criteria include that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (s 269C). The definitions for 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269F respectively. If the CEO determines that the application satisfies these criteria, they must issue a written TCO.
The obligations imposed by the Customs Act 1901 on entities and individuals include the requirement for applicants to ensure that their goods do not have substitutable counterparts produced domestically. Additionally, the CEO must publish a notice in the Gazette, inviting public submissions on the proposed TCO within a reasonable period after accepting the application as valid (s 269K(1)). Failure to respond to this notice means that no submissions were made in relation to TCO No. 1047741.
In terms of penalties and consequences, the Act does not explicitly detail specific offences for non-compliance with the TCO provisions. However, the general legal framework may impose penalties for non-compliance with customs regulations, which could include fines or other civil and criminal penalties as stipulated by relevant laws. The TCO itself does not impose any liabilities on any person and does not affect the rights of individuals or entities except to the benefit of importers who may apply for a refund of duty on goods imported since the TCO came into force (s 269S(1)).