EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1109650
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 stainless steel pipes on 21 March 2011.
Instrument
TCO No 1109650 was made on 15 June 2011. It declares that those certain stainless steel 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. 1109650 is taken to have come into force on 21 March 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 was enacted by the Parliament of Australia to facilitate the regulation of customs and excise, including the imposition of duties on imported goods. The Act establishes a framework for the administration of customs and excise, including provisions for tariff concession orders. The Tariff Concession Instrument No. 1109650 was introduced to address the specific need for tariff concessions on certain stainless steel pipes, as applied for by Cumi Australia Pty Ltd. This instrument was enacted to provide a lower rate of customs duty on these goods, in accordance with the provisions of the Customs Act 1901, and aims to ensure that the application of such concessions does not disadvantage any person other than the Commonwealth. The policy objective is to facilitate the import of these goods by reducing the financial burden on importers, thereby supporting industry needs and potentially lowering consumer prices.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders apply to goods that qualify under certain criteria, primarily concerning the absence of substitutable goods produced in Australia at the time of application. The legislation mandates that an application for a TCO must not pertain to goods explicitly excluded under section 269SJ, and if the application meets the core criteria outlined in section 269C, a TCO will be issued, effectively reducing the customs duty to zero for the specified goods. This Act applies to any person or entity seeking tariff concessions on goods imported into Australia and has a national jurisdictional reach. Importantly, the Act includes provisions for public consultation on TCO applications, although no objections were raised in this instance. The TCO does not retroactively affect the rights or impose liabilities on any person except the Commonwealth. The commencement date for the TCO aligns with the date of application, thus retroactively applying the concessions from that date.
Key Provisions
The main sections of the Customs Act 1901 that are relevant to Tariff Concession Orders (TCOs) include sections 269C, 269F, 269P, and 269S. Section 269F allows an applicant to apply for a TCO, while section 269C sets out the core criteria that the application must meet, such as the absence of substitutable goods produced in Australia at the time the application is lodged. If these criteria are met, section 269P mandates that the Chief Executive Officer of Customs (CEO) must issue a TCO, as specified in section 269P(3). The application is deemed to have come into force on the day it was lodged, under section 269S(1).
Entities and individuals governed by this Act must adhere to several obligations. Firstly, applicants must ensure that their TCO application meets the core criteria, particularly that no substitutable goods are produced in Australia at the time of application. The CEO is required to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be granted, as per subsection 269K(1). The CEO must also consider any submissions received before making a decision on the TCO. Importers who benefit from the TCO may apply for a refund of duty paid on goods imported since the effective date of the TCO, under paragraph 126(1)(r) of the Regulations.
The Customs Act 1901 imposes penalties for breaches related to TCOs, although specific penalties are not detailed in the provided text. General penalties for breaches of the Customs Act can include fines and imprisonment. For example, under section 237, a person who contravenes any provision of the Act can be fined up to 10,000 penalty units or imprisoned for up to five years, or both, for a single offence. Additionally, there are civil penalties for incorrect declarations or failure to comply with customs requirements, which can include fines and penalties for underpayment of duty or other charges. These provisions ensure that the Act is enforced effectively and that compliance is maintained.