EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1055679
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.
Reliance Worldwide applied for a TCO in respect of certain oxygen diffusion barrier tubing on 22 December 2010.
Instrument
TCO No 1055679 was made on 16 March 2011. It declares that those certain oxygen diffusion barrier tubing 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. 1055679 is taken to have come into force on 22 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 was enacted to provide a comprehensive framework for the regulation of customs and excise in Australia. This Act establishes the legislative foundation for managing the importation and exportation of goods, including the imposition of customs duties and the administration of various tariff concessions. One notable feature of the Act is its provision for Tariff Concession Orders (TCOs) under Part XVA, which allow for the reduction or exemption of customs duty on specified goods. This was introduced to address the need for flexibility in tariff application, ensuring that certain goods can benefit from reduced tariffs when no suitable Australian-made alternatives are available. The policy objective behind these concessions is to support Australian industries by allowing for tariff relief where necessary, thereby balancing the economic interests of various stakeholders. The instrument F2011L01024, specifically TCO No. 1055679, was made under the authority of the Chief Executive Officer of Customs in response to an application from Reliance Worldwide for certain oxygen diffusion barrier tubing, effective from 22 December 2010. This order exemplifies the practical application of the Act's provisions, facilitating trade and supporting industry needs through tailored tariff concessions.
Scope and Application
The Customs Act 1901, through its Tariff Concession Instrument No. 1055679, applies to any individual or entity involved in the importation of certain oxygen diffusion barrier tubing, effectively providing tariff concessions for these specific goods. The instrument was enacted to reduce the customs duty on these goods from the general rate of 5% to free, contingent upon the Chief Executive Officer of Customs determining that no substitutable goods were produced in Australia. This application is limited to the particular goods specified in the instrument and excludes other goods not mentioned therein, as delineated by section 269SJ of the Act. The instrument’s reach is national, impacting all importers across Australia who deal with the specified tubing. Additionally, the instrument does not disadvantage any person or impose new liabilities on anyone for actions taken prior to its registration, thereby ensuring that the rights of existing parties are preserved. The instrument also does not affect the rights of any person other than the Commonwealth, and no submissions were received in opposition to its publication, indicating broad acceptance of its provisions.
Key Provisions
The Tariff Concession Instrument No. 1055679, which amends the Customs Act 1901, establishes provisions for the concession of customs duty on certain goods, in this case, oxygen diffusion barrier tubing. Under section 269F (1) of the Act, an application for a Tariff Concession Order (TCO) can be made by any person to the Chief Executive Officer (CEO) of Customs. If the application does not pertain to goods specified in section 269SJ, which are ineligible for a TCO, the CEO must determine whether the application meets the core criteria as outlined in sections 269C and 269B. Specifically, section 269C requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If these criteria are met, the CEO is mandated by section 269P(3) to issue a written order that effectively declares the goods subject to the application as those to which a specified item of Schedule 4 to the Customs Tariff Act 1995 applies, thereby granting the tariff concession.
In this context, the obligations imposed on the parties include the requirement for applicants to ensure their applications meet the stipulated criteria, and for the CEO to meticulously verify the eligibility of the applications against these criteria. The CEO must also publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be made, as stipulated in section 269K(1). In the case of TCO No. 1055679, the CEO did not receive any submissions in response to this notice.
The Act also outlines specific consequences for non-compliance. While the explanatory statement does not explicitly detail offences or penalties, it is implied that any breach of the conditions set forth for a TCO could result in legal repercussions. Typically, such breaches might be subject to the general penalties outlined in the Customs Act 1901, which can include fines and imprisonment for serious violations. The absence of specific penalties in this context suggests that the existing legal framework provides sufficient deterrents against non-compliance.
Furthermore, the commencement of the TCO on the day the application was lodged, as per section 269S(1), ensures that the benefits are retroactively applied, which in this case is 22 December 2010. This date also marks the commencement of the TCO’s effects, meaning that any goods imported from this date onward will qualify for the duty concession. Importantly, the TCO does not retroactively impose any liabilities or disadvantage any person other than the Commonwealth, and it does not affect the rights of any person as they stood before the TCO was registered. Importers of the specified goods will be able to apply for a refund of any duty paid on those goods since the TCO’s effective date, as outlined in the Customs (Admin) Regulations 1997.