EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1129321
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.
Reliance Worldwide applied for a TCO in respect of certain couplings on 29 August 2011.
Instrument
TCO No 1129321 was made on 22 November 2011. It declares that those certain couplings 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. 1129321 is taken to have come into force on 29 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, facilitates the reduction of customs duties on certain imported goods through Tariff Concession Orders (TCOs). This legislation was introduced to address the need for flexibility in customs duty rates, allowing for tariff concessions to be granted where appropriate. Under section 269F of the Act, an application can be made to the Chief Executive Officer of Customs for a TCO, provided the goods in question are not excluded under section 269SJ. The primary objective of this mechanism is to lower customs duties on goods where no substitutable goods are produced in Australia in the ordinary course of business, as outlined in sections 269C, 269D and 269E of the Act. The Explanatory Statement for Tariff Concession Instrument No. 1129321 clarifies the application of this process to specific couplings, where the general duty rate of 5% is reduced to free, effective from 29 August 2011.
Scope and Application
The Tariff Concession Instrument No. 1129321, under the Customs Act 1901, applies to goods specified in the Instrument, which in this case are certain couplings. The Act allows the Chief Executive Officer of Customs (CEO) to grant Tariff Concession Orders (TCO) which lower the rate of customs duty on specified goods. This applies to persons or entities seeking to import these goods into Australia, provided they comply with the criteria set out in the Act. The Act extends to the entire Commonwealth of Australia and applies to all imports of the specified goods. However, it does not apply to goods specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. The Instrument does not disadvantage any person (other than the Commonwealth) as it only affects rights from the date of registration and does not impose any liabilities on any person. The CEO must satisfy specific core criteria before making a TCO, including that no substitutable goods were produced in Australia on the day the application was lodged. The Instrument also mandates that the CEO publish a notice in the Gazette inviting submissions from any person who may have reasons why the TCO should not be made, although in this instance, no submissions were received. The Instrument comes into force on the date the application for the TCO was lodged, and it does not retroactively affect any transactions or duties that occurred prior to this date.
Key Provisions
The Tariff Concession Instrument No. 1129321 under the Customs Act 1901 (section 269F) establishes the procedure for granting a Tariff Concession Order (TCO) for certain goods, in this case, couplings. The main operative section is section 269C, which stipulates that a 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. Section 269P(3) then mandates that if the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria, they must make a written order declaring the goods to which the TCO applies. In this instance, the CEO issued TCO No. 1129321 on 22 November 2011, declaring that the certain couplings are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free, whereas the general rate is 5%.
The obligations imposed by the Act on the parties involved are primarily on the CEO of Customs, who must assess TCO applications to ensure they meet the core criteria outlined in section 269C. If the application is valid, the CEO must make a written order as per section 269P(3). Additionally, section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. In this case, the CEO did not receive any submissions in response to the published notice. Furthermore, section 269S(1) specifies that a TCO comes into force on the day the application was lodged, which for TCO No. 1129321 was 29 August 2011.
The Act does not explicitly state offences, penalties, or consequences for breach in the context of TCO applications. However, the general compliance framework of the Customs Act 1901 applies, which means that any misrepresentation or fraudulent application could potentially lead to legal action under other sections of the Act, such as section 244 which pertains to false statements. While the explanatory statement does not specify penalties for TCO-related breaches, penalties for general violations of the Customs Act can include fines and imprisonment, with the exact penalties depending on the nature and severity of the offence.