EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1105088
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.
Supreme Drill Pipe applied for a TCO in respect of certain friction welded drill pipe on 07 February 2011.
Instrument
TCO No 1105088 was made on 09 May 2011. It declares that those certain friction welded drill pipe 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. 1105088 is taken to have come into force on 07 February 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. 1105088, enacted in 2011, addresses the need for tariff concessions on specific imported goods to promote economic efficiency and competitiveness in the Australian market. This instrument was developed under the authority of the Customs Act 1901, managed by the Parliament of Australia, to provide relief to industries that rely on importing particular goods that are not produced domestically. The primary policy objective is to facilitate smoother trade operations by reducing the financial burden of customs duties on certain imported goods, thereby supporting the operational costs and competitiveness of businesses that rely on these imports. The instrument was introduced to ensure that no substitutable goods were produced in Australia at the time the application was lodged, thereby qualifying for the tariff concession.
The Customs Act 1901 allows for the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCO) that apply lower rates of customs duty to specific goods, provided they meet certain criteria, such as the absence of substitutable goods produced in Australia. In this case, Supreme Drill Pipe applied for and was granted a TCO for certain friction welded drill pipe, with the duty rate being reduced from the general rate of 5% to free. This measure came into effect on the date the application was lodged, 7 February 2011, and was published in the Gazette with an invitation for submissions, none of which were received. The TCO ensures that the rights of importers are positively affected, allowing them to apply for duty refunds on imports made since the effective date.
Scope and Application
The Customs Act 1901 applies to the application process for Tariff Concession Orders (TCOs) which are issued by the Chief Executive Officer of Customs (CEO) under specific conditions. The Act facilitates lower customs duty rates for goods that meet the criteria set out in section 269C, particularly when no substitutable goods are produced in Australia. This legislation is applicable to entities and individuals who seek to import goods eligible for tariff concessions, and it affects the customs duties on those goods. The scope of this legislation extends nationally, as it is a Commonwealth Act, but its application is specifically concerned with the customs duties on goods entering Australia. The Act explicitly excludes certain goods, as outlined in section 269SJ, from being subject to a TCO. Furthermore, the Act allows for the extension or restriction of its application through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the rates of duty. In this instance, Tariff Concession Instrument No. 1105088 was made to provide a tariff concession for certain friction welded drill pipes, effectively setting their duty rate to free, from the date the application was lodged.
Key Provisions
The Customs Act 1901, under Part XVA, enables the Chief Executive Officer of Customs (CEO) to make Tariff Concession Orders (TCOs) that lower the customs duty on specified goods. This process is initiated by an application under section 269F, where an individual or entity applies for a TCO on goods that are not prohibited under section 269SJ. If the CEO determines that the application is valid and that no substitutable goods are produced in Australia on the date of application, the CEO is required to make a TCO under section 269P(3). The TCO specifies the reduced duty rate, as outlined in the Customs Tariff Act 1995.
The obligations under this legislation are primarily on the applicant and the CEO. The applicant must ensure that their application for a TCO is valid and that it pertains to goods not excluded under section 269SJ. The CEO, upon receiving an application, must verify the criteria set out in section 269C, which mandates that no substitutable goods are produced in Australia on the date of application. The CEO must also publish a notice in the Gazette, inviting submissions from any interested parties within a reasonable timeframe, as per section 269K(1). In this case, no submissions were received in response to the published notice.
Failure to comply with the requirements of the Customs Act 1901 regarding TCOs may result in legal consequences. Although specific offences, penalties, or civil/criminal consequences are not detailed in the provided text, it is implied that any breach of the conditions for granting a TCO could lead to the nullification of the TCO and potential re-assessment of duties on the affected goods. Importers who benefit from a TCO must ensure compliance with all terms to avoid any retrospective liabilities or disadvantages.