EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1053203
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.
Total Eden Pty Ltd applied for a TCO in respect of certain fire sprinkler pipes on 06 December 2010.
Instrument
TCO No 1053203 was made on 28 February 2011. It declares that those certain fire sprinkler 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. 1053203 is taken to have come into force on 06 December 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 under which the Chief Executive Officer of Customs can issue Tariff Concession Orders (TCOs) to reduce the rate of customs duty on certain goods. This legislation addresses the problem of high customs duties that may hinder the importation of goods that are not produced domestically, thereby promoting trade and economic growth. Specifically, section 269F of the Act allows for applications to be made for tariff concessions, provided the goods are not specified in section 269SJ and meet the core criteria outlined in section 269C. In response to an application from Total Eden Pty Ltd for certain fire sprinkler pipes, TCO No. 1053203 was issued on 28 February 2011, applying a zero rate of duty on these goods, which otherwise attract a general rate of 5%. The policy objective is to facilitate the importation of goods that cannot be substituted by Australian-made products, thus supporting market access and potentially lowering costs for consumers.
Scope and Application
The Tariff Concession Instrument No. 1053203, made under Part XVA of the Customs Act 1901, pertains to the application of tariff concessions to certain fire sprinkler pipes, as applied by Total Eden Pty Ltd on 06 December 2010. This instrument is applicable to any entity or individual importing the specified fire sprinkler pipes, thereby reducing the customs duty from the general rate of 5% to a tariff-free rate, provided the application meets the criteria set out in the Act. The concession is effective from the date the application was lodged, and no submissions opposing the concession were received by the Chief Executive Officer of Customs. The instrument’s scope is limited to the specified goods and does not disadvantage any person except the Commonwealth, nor does it impose any liabilities on individuals or entities other than the Commonwealth. The application of this Tariff Concession Order is subject to the broader regulatory framework outlined in the Customs Tariff Act 1995 and its subordinate instruments, which may further define and extend the application of such concessions.
Key Provisions
The main operative sections of this legislation pertain to the Customs Act 1901 and specifically focus on Tariff Concession Orders (TCOs). Under section 269F (1), individuals or entities can apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning certain goods. If the application does not involve goods specified in section 269SJ, which are ineligible for a TCO, the CEO must assess whether the application meets the core criteria outlined in section 269C. This requires a determination that no substitutable goods were produced in Australia on the date the application was lodged. Definitions pertinent to this process include 'goods produced in Australia' (section 269D), 'ordinary course of business' (section 269E), and 'substitutable goods' (section 269D). If the CEO is satisfied that the application meets these criteria, they must issue a written order (section 269P(3)), which declares the goods to which the concession applies and specifies the relevant item in Schedule 4 of the Customs Tariff Act 1995.
The Act imposes specific obligations on both the CEO and applicants. For the CEO, it is mandatory to publish a notice in the Gazette once an application is accepted as valid (subsection 269K(1)). This notice invites submissions from any interested parties who may have reasons to oppose the concession. After reviewing any submissions, the CEO must decide whether to grant the TCO. For applicants, they must ensure their application meets the core criteria and provide any required information to substantiate their claim that no substitutable goods were produced in Australia. Additionally, applicants must adhere to any procedural requirements set forth in the Act and its subsidiary legislation.
Breach of the obligations and requirements under this legislation can lead to various consequences. While specific offences and penalties are not detailed in the explanatory statement, it is implied that failure to comply with the Act's provisions could result in legal ramifications. The Act generally provides for penalties under sections such as 271 and 272, which encompass fines and imprisonment for non-compliance with customs regulations. For TCOs, if an entity is found to have misrepresented information or failed to meet the core criteria, they could face civil or criminal penalties, depending on the severity of the breach. The maximum penalties could include substantial fines or imprisonment, as stipulated in the broader framework of the Customs Act 1901.