EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1111135
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.
Stainless Pipe and Fittings Australia applied for a TCO in respect of certain bolts and screws on 01 April 2011.
Instrument
TCO No 1111135 was made on 20 June 2011. It declares that those certain bolts and screws 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. 1111135 is taken to have come into force on 01 April 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, established a framework for managing customs duties on imported goods. One aspect of this Act involves the ability to grant Tariff Concession Orders (TCOs) to reduce or eliminate customs duties on specific goods under certain conditions. The 2012 Tariff Concession Instrument No. 1111135 was introduced to address a particular application by Stainless Pipe and Fittings Australia for a TCO concerning certain bolts and screws. The policy objective is to provide tariff relief for imported goods where no suitable Australian-made alternatives exist, thereby promoting fair trade practices and potentially encouraging investment in Australian manufacturing if such alternatives were to emerge. The Tariff Concession Order No. 1111135 was made on 20 June 2011, declaring that the specified bolts and screws are subject to a duty-free rate, effective from the date of the application, 1 April 2011. This measure was taken after confirming that no substitutable goods were produced in Australia at the time, in line with the core criteria set out in the Customs Act 1901.
Scope and Application
The Tariff Concession Instrument No. 1111135 under the Customs Act 1901 applies specifically to certain bolts and screws, granting them tariff concessions. This legislation targets entities or individuals who import these goods, aiming to reduce the customs duty rate from the general rate of 5% to free, provided that no substitutable goods are produced in Australia. The application of this instrument extends across the Commonwealth of Australia, impacting trade practices and import duties associated with the specified goods. Notably, the instrument does not affect any existing rights or impose liabilities on any person for actions taken prior to its effective date, ensuring that only future imports benefit from the reduced duty rate. The scope of the Act is further refined through its exclusion of certain goods, as outlined in section 269SJ of the Customs Act 1901, ensuring clarity on the applicability of tariff concessions.
Key Provisions
The primary sections of this legislation include section 269C, which defines the core criteria for the application of a Tariff Concession Order (TCO). This criterion requires that on the day the application is lodged, no substitutable goods must be produced in Australia in the ordinary course of business. According to section 269B, the terms "goods produced in Australia," "ordinary course of business," and "substitutable goods" are defined in sections 269D, 269E, and 269F respectively. Section 269P(3) outlines that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, they must make a written order (a TCO) declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes specific obligations on the parties involved. The applicant must ensure that their TCO application meets the core criteria set out in section 269C. The CEO must assess the application against these criteria and, if satisfied, publish a notice in the Gazette inviting any interested parties to lodge submissions against the TCO. If no submissions are received, the CEO must proceed to make the TCO. The CEO must also ensure that the TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on anyone in respect of anything done or omitted before the date of registration.
Breaching the requirements of the Customs Act 1901 can result in significant consequences. While specific offences and penalties are not detailed in this particular explanatory statement, under the broader Customs Act, non-compliance can lead to criminal and civil penalties. For criminal offences, penalties can include fines and imprisonment. For civil offences, penalties can include financial penalties and in some cases, the confiscation of goods. The maximum penalties will depend on the specific breach and the severity of the offence. It is important for parties to adhere to the legislative requirements to avoid these consequences.