EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1101469
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 Rubber Pty Ltd applied for a TCO in respect of certain flexible hose and or tubing on 12 January 2011.
Instrument
TCO No 1101469 was made on 04 April 2011. It declares that those certain flexible hose and or 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. 1101469 is taken to have come into force on 12 January 2011.
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 Tariff Concession Instrument No. 1101469 was enacted in 2011 as an amendment to the Customs Act 1901. This legislation was introduced to address the need for tariff concessions on specific goods, in this case, certain flexible hose and tubing, by granting a lower rate of customs duty through Tariff Concession Orders (TCOs). The Tariff Concession Orders are made by the Chief Executive Officer of Customs, who must be satisfied that the application for a TCO meets certain core criteria, such as the absence of substitutable goods produced in Australia. The Tariff Concession Instrument No. 1101469 was introduced by the Australian Parliament to provide a streamlined process for tariff concessions, ensuring that eligible goods receive reduced customs duty rates. The policy objective of this instrument is to facilitate smoother trade and economic activity by lowering the cost of importing specific goods.
Scope and Application
The Tariff Concession Instrument No. 1101469 applies to Total Rubber Pty Ltd and the goods specified within the Instrument, namely certain flexible hose and tubing. It is established under the Customs Act 1901, specifically within Part XVA, which outlines the process for Tariff Concession Orders (TCOs). This Act applies at the Commonwealth level and is administered by the Chief Executive Officer of Customs, who has the authority to make decisions regarding TCOs. The geographic and jurisdictional reach of this legislation is national, as it pertains to the federal customs system in Australia. The Act does not specify any exclusions, exemptions, or thresholds in the context of this particular TCO, although section 269SJ of the Act excludes certain goods from being subject to a TCO. The application of this Act can be extended or restricted through subordinate instruments, such as regulations or further orders, which may provide additional details on the application and implementation of TCOs.
Key Provisions
The Tariff Concession Instrument No. 1101469, under the Customs Act 1901, introduces a lower rate of customs duty for specific goods, namely certain flexible hoses and tubing, subject to a Tariff Concession Order (TCO). This concession is applicable from the date the application for the TCO was lodged, which in this case was 12 January 2011 (sections 269F and 269S(1)). The instrument was formally made on 4 April 2011 (section 269P(3)), and it specifies that these goods are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, thereby granting them a free rate of duty instead of the general 5% rate.
The obligations imposed by this Act primarily fall on the Chief Executive Officer of Customs (CEO), who is required to make a written order (the TCO) if certain criteria are met. For an application to be considered, it must not pertain to goods listed in section 269SJ of the Act, which are ineligible for a TCO. Additionally, the CEO must be satisfied that the application meets the core criteria, namely that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (sections 269C and 269SJ). The CEO is also mandated to publish a notice in the Gazette, inviting any interested parties to submit reasons why the TCO should not be made (subsection 269K(1)). In this instance, no submissions were received.
The Act delineates several potential consequences for non-compliance or misuse of the provisions outlined. Firstly, any person who contravenes the provisions of the Customs Act 1901 may be subject to criminal penalties. While the specific offences and penalties are not detailed in the explanatory statement, the Act generally allows for fines and imprisonment for serious breaches. Furthermore, the Act ensures that the rights of any person (other than the Commonwealth) as at the date of registration are not adversely affected by the TCO. The rights of importers, however, are positively impacted, as they can apply for a refund of duty on goods imported since the TCO came into force (paragraph 126(1)(r) of the Regulations). Importantly, the TCO does not impose any new liabilities on any person.
In summary, the Tariff Concession Instrument No. 1101469 provides a reduced customs duty rate for specific flexible hoses and tubing, effective from 12 January 2011. The CEO must ensure that applications meet specific criteria before issuing a TCO, and while there are obligations and potential consequences for misuse, the primary effect is to benefit importers by reducing their duty costs.