EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1135921
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 heating pipe holder clips on 27 October 2011.
Instrument
TCO No 1135921 was made on 16 January 2012. It declares that those certain heating pipe holder clips 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. 1135921 is taken to have come into force on 27 October 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 Australian Parliament to provide for the regulation of the importation and exportation of goods, including the imposition and collection of customs duty. The introduction of Tariff Concession Orders (TCOs) under Part XVA of the Act addresses the problem of ensuring that Australian consumers and businesses have access to competitively priced goods by allowing the Chief Executive Officer of Customs to grant concessions on customs duty for specified goods. This mechanism was introduced to support trade and economic policy objectives by potentially lowering the cost of imported goods, thus benefiting consumers and businesses. Instrument TCO No. 1135921, made on 16 January 2012, is an example of such a concession, applied to certain heating pipe holder clips, where the general rate of duty of 5% was reduced to free, provided that no substitutable goods were produced in Australia. The process includes public consultation, as required by the Act, although in this instance, no objections were received.
Scope and Application
The Tariff Concession Instrument No. 1135921 under the Customs Act 1901 applies specifically to certain heating pipe holder clips. The Act provides a framework through which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). An application for a TCO is evaluated against core criteria specified in the Act, primarily focusing on whether substitutable goods are produced in Australia. If the CEO determines that the application meets these criteria, a TCO is issued, thereby applying a reduced rate of customs duty to the specified goods. The application process includes a mandatory publication in the Gazette to invite any objections, although no submissions were received in this case. The TCO came into effect on 27 October 2011, the date the application was lodged, and it does not affect any pre-existing rights or impose new liabilities. Importers of the specified goods may benefit from this concession by applying for a refund of duties paid since the TCO's effective date.
Key Provisions
The primary operative sections of this legislation are sections 269C, 269F, and 269P of the Customs Act 1901, which together establish the process for Tariff Concession Orders (TCO). Section 269F allows an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO concerning certain goods. If the application is not for goods specified in section 269SJ, which lists goods that cannot be subject to a TCO, the CEO must assess whether the application meets the core criteria outlined in section 269C. If satisfied, the CEO must issue a written order, a TCO, under section 269P, specifying the applicable customs duty on the goods.
Under this Act, the CEO is mandated to evaluate TCO applications to determine if they meet the core criteria. This involves verifying that, on the day the application is lodged, no substitutable goods are produced in Australia in the ordinary course of business. Substitutable goods are defined in section 269D as those produced in Australia that can be used in the same way as the goods in question, including any design uses. The CEO must also consider the meaning of 'ordinary course of business' as per section 269E. If the CEO determines that the application meets these criteria, they must issue a TCO, declaring that the specified goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The legislation imposes several obligations on the parties involved. The CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as stipulated in section 269K(1). In the case of TCO No. 1135921, no submissions were received. The CEO is also required to ensure that the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration, so as to disadvantage that person or impose liabilities for actions taken before the date of registration. This TCO specifically benefits importers by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO, as per paragraph 126(1)(r) of the Regulations.
For breaches of the provisions under this Act, there are both civil and criminal consequences. While the specific penalties for breaches are not detailed in the explanatory statement, the Customs Act 1901 generally provides for substantial penalties for non-compliance. These can include fines and imprisonment for serious offences, reflecting the importance of adhering to the Act's requirements. The precise penalties would depend on the nature and severity of the breach, but they underscore the legal obligation to comply with the terms and conditions set forth in the Act and its related regulations.