EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1112481
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.
BHP Billiton Petroleum applied for a TCO in respect of certain electric resistance welded (erw) line pipe on 14 April 2011.
Instrument
TCO No 1112481 was made on 11 July 2011. It declares that those certain electric resistance welded (erw) line 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. 1112481 is taken to have come into force on 14 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 was enacted by the Parliament of Australia to regulate and control the importation and exportation of goods, among other things. The Act provides for the establishment of a tariff concession scheme, which allows for the reduction or exemption of customs duty on certain goods under specific conditions. The Tariff Concession Instrument No. 1112481, issued on 11 July 2011, is an example of this scheme in action. It was introduced to address the specific need of BHP Billiton Petroleum for a tariff concession on certain electric resistance welded line pipe, allowing for these goods to be imported without incurring the usual customs duty. The instrument was made following the application by BHP Billiton Petroleum, and the decision to grant the concession was based on the absence of substitutable goods produced in Australia at the time of application, fulfilling the core criteria set out in the Act. The policy objective of such instruments is to facilitate the importation of goods that are not readily available in Australia, thereby supporting industry needs and potentially lowering costs for consumers.
Scope and Application
The Tariff Concession Instrument No. 1112481, made under the Customs Act 1901, applies to the entity BHP Billiton Petroleum and concerns certain electric resistance welded (erw) line pipe. This legislation facilitates tariff concessions for specific goods, allowing for reduced customs duty rates, in this instance setting the rate to free for the goods in question. The Act is administered by the Chief Executive Officer of Customs (CEO) and applies to any entity seeking a tariff concession order (TCO) for goods not specified in section 269SJ of the Act, which excludes certain goods from being subject to a TCO. The geographic reach of this legislation is national, as it falls under the Commonwealth’s authority. The CEO must determine if the application meets core criteria, particularly whether no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. In this case, the CEO found that no such goods were produced, leading to the issuance of the TCO on 11 July 2011, effective from the date of the application on 14 April 2011. The TCO does not retroactively affect the rights of any person other than the Commonwealth and does not impose liabilities on anyone, while potentially benefiting importers who may apply for duty refunds for imports since the TCO's effective date.
Key Provisions
The Tariff Concession Instrument No. 1112481, issued under the Customs Act 1901, outlines the process and conditions for the application of Tariff Concession Orders (TCOs) for specific goods. Section 269F of the Act allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning goods, provided that the application does not pertain to goods specified in section 269SJ, which lists those that cannot be subject to a TCO. If the CEO is satisfied that the application is valid and meets the core criteria, they must make a written order (section 269P(3)) declaring that the goods in question are subject to a prescribed rate in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties involved are clear and straightforward. The CEO of Customs has the responsibility to determine if an application for a TCO meets the core criteria, specifically if no substitutable goods were produced in Australia on the day the application was lodged (section 269C). If the CEO decides that the application meets these criteria, they must proceed to issue a TCO (section 269P(3)). Furthermore, as soon as practicable after accepting a TCO application, the CEO is required to publish a notice in the Gazette inviting any interested parties to submit their views on why the TCO should not be granted (subsection 269K(1)). In this instance, no submissions were received in response to the published notice.
In terms of potential breaches and penalties, the Act does not explicitly outline specific offences or penalties for failing to comply with the provisions of a TCO. However, general legal consequences may apply if any party fails to adhere to the obligations set out by the Act, such as the CEO not properly assessing an application or the applicant providing misleading information. The act of not complying with customs regulations could lead to civil or criminal proceedings, depending on the severity of the breach, although specific penalties are not detailed in the context of this particular TCO. The rights of importers are protected under this TCO, as it does not disadvantage any person and does not impose any liabilities on individuals in respect of actions taken before the date of registration. Importers can also apply for a refund of duty on goods imported since the TCO is deemed to have come into force.