EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1127603
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.
Fosters Group applied for a TCO in respect of certain piping system on 16 August 2011.
Instrument
TCO No 1127603 was made on 14 November 2011. It declares that those certain piping system 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. 1127603 is taken to have come into force on 16 August 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 Commonwealth Parliament, establishes a framework under which Tariff Concession Orders (TCOs) can be issued to provide tariff concessions on certain goods. These concessions typically reduce the customs duty payable on specified goods. The Customs Act 1901 aims to provide relief to industries that might otherwise be disadvantaged by high customs duties on goods that are not produced domestically. Tariff Concession Instrument No. 1127603, made under the Act, provides a tariff concession on certain piping systems, as no substitutable goods are produced in Australia. This instrument was introduced to support Fosters Group, which applied for the concession on 16 August 2011. The policy objective is to alleviate the financial burden on importers and users of these specific goods by reducing their duty obligations, thereby promoting economic efficiency and competitiveness.
Scope and Application
The Tariff Concession Instrument No. 1127603, under the Customs Act 1901, applies to goods specified in the instrument, namely certain piping systems, which are granted a tariff concession by reducing the customs duty rate to zero. This instrument is applicable to entities and individuals involved in the importation of these goods, effectively benefiting importers by exempting them from the usual customs duty that would otherwise apply. The legislation extends its reach across the Commonwealth of Australia, as per the scope of the Customs Act 1901, thereby affecting national trade practices and import duties associated with the specified goods. The instrument does not impose any liabilities on persons other than the Commonwealth and does not disadvantage anyone by retroactively affecting rights as of the date of registration. Additionally, the Act provides a mechanism for subordinate instruments to extend or restrict its application, although this particular instrument does not elaborate on such provisions.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 1127603, under the Customs Act 1901, concern the establishment of a Tariff Concession Order (TCO) for specific goods, in this case, certain piping systems (section 269F). This instrument was issued following an application by Fosters Group, and it declares that the piping systems in question are subject to the tariff concessions outlined in item 50 of Schedule 4 of the Customs Tariff Act 1995 (section 269P(3)). As a result, the general rate of customs duty, which would ordinarily be 5%, is reduced to free for these goods (section 269P(3)). The instrument also specifies that the concession is effective from the date the application was lodged, 16 August 2011 (subsection 269S(1)).
The obligations imposed by this Act on the parties involved, particularly the Chief Executive Officer of Customs (CEO), include accepting a valid application for a TCO and publishing a notice in the Gazette, inviting any interested parties to submit objections to the concession (subsection 269K(1)). In this instance, the CEO did not receive any objections to the TCO application, thus fulfilling the requirement to consider any submissions. Additionally, the Act requires that the TCO does not disadvantage any person (other than the Commonwealth) by affecting their rights as at the date of registration or imposing liabilities in respect of actions taken prior to the registration (subsection 269S(1)).
The legislation does not explicitly outline offences, penalties, or civil/criminal consequences for breaches of the TCO provisions. However, the Act does provide for the refund of duty on goods imported since the effective date of the TCO for importers (paragraph 126(1)(r) of the Regulations). This implies that any failure to adhere to the terms of the TCO could result in financial penalties or the requirement to repay any overpaid duties. There are no stipulated maximum penalties in the text provided, but it is reasonable to infer that any non-compliance with the tariff concessions or refund processes could be subject to the general administrative or legal consequences as outlined in other sections of the Customs Act or related regulations.