EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1107491
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.
Cumi (Australia) Pty Ltd applied for a TCO in respect of certain steel pipe flanges on 28 February 2011.
Instrument
TCO No 1107491 was made on 30 May 2011. It declares that those certain steel pipe flanges 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. 1107491 is taken to have come into force on 28 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for the regulation of goods entering and leaving Australia, including the imposition of customs duty. The Act includes provisions for Tariff Concession Orders (TCOs) under Part XVA, which allow for a lower rate of customs duty to apply to specified goods if certain criteria are met. Instrument No. 1107491, made under this Act, addresses the need to provide tariff concessions for specific goods, in this case certain steel pipe flanges, by the Chief Executive Officer of Customs. The aim is to ensure that such concessions are granted only when no substitutable goods are produced in Australia, thereby fostering fair trade practices and potentially stimulating industry growth by reducing the cost of importing certain goods.
Scope and Application
The Tariff Concession Instrument No. 1107491, made under the Customs Act 1901, applies to the concession of customs duty rates for certain steel pipe flanges as specified in the instrument. The instrument was enacted to facilitate the application made by Cumi (Australia) Pty Ltd, aiming to lower the customs duty on these specific goods from the general rate of 5% to a duty-free rate. This concession applies to the goods identified in the instrument and becomes effective from the date the application was lodged, which is 28 February 2011. The instrument is crafted to ensure that the application of the tariff concession does not adversely affect any existing rights or impose new liabilities on any party other than the Commonwealth, safeguarding the interests of importers who may apply for duty refunds on goods imported since the concession's effective date. The scope of this legislation is limited to the specified goods and does not extend to other types of goods or industries, as it is tailored to meet the specific criteria set out in the Customs Act 1901.
Key Provisions
The key provisions of the Tariff Concession Instrument No. 1107491 (Tariff Concession Order or TCO) are outlined under Part XVA of the Customs Act 1901 (the Act). Section 269F of the Act allows for an application to be made to the Chief Executive Officer of Customs (the CEO) for a TCO concerning specific goods, where the application is not in respect of goods specified in section 269SJ, which are ineligible for TCOs. Section 269C stipulates that the TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The CEO must then determine if the application aligns with these criteria and subsequently issue a written TCO if satisfied.
The obligations imposed by this legislation on the parties involved are primarily on the applicant and the CEO. The applicant must ensure that the TCO application is valid, meaning it pertains to goods not listed in section 269SJ and that no substitutable goods were produced in Australia on the day the application was made. The CEO must review the application and, if it meets the core criteria, make a written TCO and publish a notice in the Gazette inviting submissions from any interested parties. If no submissions are received, the CEO proceeds with the TCO. Section 269K(1) mandates that the CEO must publish a notice in the Gazette as soon as practicable after accepting the application as valid, providing an opportunity for objections.
In terms of consequences, the Act does not specify any criminal or civil penalties for breach of the TCO provisions. However, it is important to note that the TCO does not affect the rights of any person other than the Commonwealth as at the date of registration. This means that the rights of importers will be beneficially affected, as they will be able to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force, as per paragraph 126(1)(r) of the Regulations. The TCO itself does not impose any liabilities on any person, thereby safeguarding against any disadvantage to those affected by its provisions.