EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1132493
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.
Thomas and Betts Australasia applied for a TCO in respect of certain conduit fittings on 22 September 2011.
Instrument
TCO No 1132493 was made on 19 December 2011. It declares that those certain conduit fittings 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. 1132493 is taken to have come into force on 22 September 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, provides a framework for the administration of customs duties and the regulation of imported and exported goods. The Act established a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO) to apply lower rates of customs duty to specified goods. This legislative measure was introduced to address the need for tariff concessions that can facilitate trade by reducing the cost burden on certain imported goods. The objective is to ensure that Australian businesses can compete effectively by granting tariff relief for goods where no substitutable domestic product exists. This is particularly important in maintaining the competitiveness of industries that rely on imported components or materials. The Tariff Concession Instrument No. 1132493, issued on 19 December 2011, is an example of such a measure, providing a tariff concession for certain conduit fittings, thereby reducing the duty from 5% to free, effective from the date the application was lodged, 22 September 2011.
Scope and Application
The Tariff Concession Instrument No. 1132493, made under the Customs Act 1901, applies to goods specified in the instrument, in this case, certain conduit fittings, which have been granted a concession on the rate of customs duty. The instrument was created following an application by Thomas and Betts Australasia, and it came into effect on the date of the application, 22 September 2011. The instrument applies nationally, as it falls under the Commonwealth's jurisdiction, and it extends to any entity or person importing the specified goods into Australia. The instrument exempts these particular conduit fittings from the general rate of duty, which is 5%, and instead imposes a rate of duty of free. The legislation does not apply to goods that are specified in section 269SJ of the Act as those that cannot be subject to a Tariff Concession Order. The CEO of Customs must be satisfied that no substitutable goods are produced in Australia to approve a Tariff Concession Order, as outlined in section 269C of the Act. The instrument may be further defined or modified through subordinate instruments as necessary.
Key Provisions
The Customs Act 1901, as modified by the Tariff Concession Instrument No. 1132493, introduces a tariff concession order (TCO) that applies to certain conduit fittings (section 269F). This TCO grants a concession, effectively setting the customs duty on these goods at zero, as opposed to the general rate of 5% (section 269P(3)). The instrument specifies that these conduit fittings are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). To qualify for this concession, the Chief Executive Officer (CEO) of Customs must be satisfied that no substitutable goods were produced in Australia on the day the application was lodged, and that the application does not pertain to goods specified in section 269SJ of the Act (sections 269B, 269C, 269D, and 269E).
The Act imposes specific obligations on the parties involved. For instance, section 269K(1) mandates that once an application is accepted as valid, the CEO must promptly publish a notice in the Gazette inviting any interested parties to submit objections or reasons why the TCO should not be made. In the case of TCO No. 1132493, no submissions were received in response to this invitation (subsection 269K(1)). Additionally, section 269S(1) stipulates that a TCO takes effect on the day the application is lodged, which for TCO No. 1132493, is 22 September 2011.
Failure to comply with the requirements set out in the Customs Act 1901 and the related regulations could result in various legal consequences. While the explanatory statement does not specify exact penalties, breaches of customs regulations generally could lead to fines, imprisonment, or both, depending on the severity of the offence. For instance, knowingly making a false statement or providing misleading information in a TCO application could be prosecuted as a criminal offence under section 269T of the Act, potentially resulting in penalties of up to $22,200 or imprisonment for up to two years, or both. Civil penalties may also apply for breaches of the Act or associated regulations, although the specifics would depend on the nature and extent of the violation.