EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1047743
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 or pipe fittings on 26 October 2010.
Instrument
TCO No 1047743 was made on 31 March 2011. It declares that those certain tube or pipe 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. 1047743 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 Parliament of Australia, establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. The Act addresses the need to provide relief on customs duties for specific goods, provided no substitutable goods are produced in Australia. Tariff Concession Instrument No. 1047743, issued on 31 March 2011, applies this framework to certain tube or pipe fittings, granting them a free rate of duty, which contrasts with the general rate of 5%. The instrument was introduced following an application by Blucher Australia Pty Ltd and became effective on 26 October 2010, the date the application was lodged. This concession does not disadvantage any existing rights holders and allows for duty refunds for importers of the specified goods from the effective date.
Scope and Application
The Tariff Concession Order (TCO) No. 1047743 applies to the specific goods, namely certain tube or pipe fittings, which are subject to the application made by Blucher Australia Pty Ltd on 26 October 2010. The Act applies to any entity or individual seeking tariff concessions for goods that are not produced in Australia and for which no substitutable goods are produced domestically in the ordinary course of business. The primary focus of this legislation is to provide relief on customs duty for imported goods that are not domestically produced, thereby encouraging trade and potentially reducing costs for importers. The geographical scope of the Act is national, as it pertains to the application and processing of tariff concessions under the Customs Act 1901 across Australia. The Act explicitly excludes goods specified in section 269SJ, which are ineligible for tariff concessions. Furthermore, the application and issuance of TCOs may be subject to additional criteria and conditions outlined in subordinate instruments, which can extend or restrict the application of the Act. The TCO No. 1047743 came into effect on 26 October 2010, the date on which the application was lodged, and benefits importers by allowing them to claim refunds for duty paid on the specified goods imported since that date.
Key Provisions
The Tariff Concession Instrument No. 1047743, made under section 269F of the Customs Act 1901 (the Act), declares that certain tube or pipe fittings are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, thereby entitling them to a tariff concession. Specifically, section 269C of the Act states that if the Chief Executive Officer (the CEO) of Customs is satisfied that no substitutable goods were produced in Australia on the day the application was lodged, and there are no prohibitions under section 269SJ, the CEO must make a written order (a Tariff Concession Order, or TCO) (section 269P(3)). The TCO, in this case, item 50 of Schedule 4 to the Tariff, effectively imposes a zero rate of duty on these fittings, which would otherwise be subject to a general rate of duty of 5%.
The Act imposes certain obligations on both the CEO and applicants for a TCO. For the CEO, section 269K(1) mandates the publication of a notice in the Gazette inviting any person to lodge a submission if they believe there are reasons why the TCO should not be made. In this instance, no submissions were received. For applicants, section 269F requires that they apply for a TCO in respect of goods, and the CEO must then assess whether the application meets the core criteria, specifically whether no substitutable goods were produced in Australia at the time of the application (section 269C).
Breaching the conditions set out in the Act can lead to civil and criminal consequences. Although the specific offences, penalties, or consequences for non-compliance with the TCO are not detailed in the explanatory statement, the Act generally provides for penalties for non-compliance with its provisions. These can include fines and imprisonment, depending on the severity of the breach. The Customs Act 1901 contains provisions for penalties and enforcement mechanisms, which would apply in the event of non-compliance with the TCO. It is important for parties to adhere to the conditions set out in the Act to avoid any potential legal repercussions.