EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0411356
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.
Austral Wright Metals Pty Ltd applied for a TCO in respect of certain copper plates and/or sheets and/or strip on 2 November 2004.
Instrument
TCO No 0411356 was made on 7 January 2005. It declares that those certain copper plates and/or sheets and/or strip 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 3%.
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. 0411356 is taken to have come into force on 2 November 2004.
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 Tariff Concession Instrument No. 0411356 was enacted under the Customs Act 1901, aiming to address the need for tariff concessions on specific imported goods to facilitate trade and economic efficiency. The instrument was introduced to provide relief to importers by reducing the customs duty on certain copper plates, sheets, and strips from the general rate of 5% to a concessional rate of 3%. This reduction is intended to make imported goods more competitive in the Australian market by lowering their cost, thereby encouraging trade and supporting industries reliant on these materials. The instrument was enacted by the Chief Executive Officer of Customs, following a valid application from Austral Wright Metals Pty Ltd and after satisfying the core criteria that no substitutable goods were being produced in Australia.
The Customs Act 1901, as amended, allows for the creation of Tariff Concession Orders (TCOs) to apply lower customs duties on certain imported goods, provided the application meets specific criteria. In this instance, the CEO determined that the application met the core criteria and published a notice in the Gazette, inviting submissions from interested parties. The absence of any submissions meant the TCO could proceed, with the concessional tariff rate coming into effect on the date the application was lodged, 2 November 2004. This legislative action ensures that the rights of importers are protected, allowing them to seek refunds on duties paid before the TCO's effective date, without imposing any liabilities on non-Commonwealth entities.
Scope and Application
The Tariff Concession Instrument No. 0411356, which is made under the Customs Act 1901, applies to specific copper plates, sheets, and strips that Austral Wright Metals Pty Ltd applied for a tariff concession on. The instrument is relevant for entities that are importing these goods into Australia and those who are subject to the customs duties outlined in the Customs Tariff Act 1995. The application of the Tariff Concession Order (TCO) is limited to the goods specified in the application and does not extend to any other goods unless specifically included in subsequent orders. The geographic reach of this legislation is national, as it pertains to customs duties applicable throughout Australia. The TCO does not disadvantage any person other than the Commonwealth and does not impose liabilities on any person for actions taken before the TCO's effective date. Exclusions from this TCO include goods specified in section 269SJ of the Customs Act 1901, which cannot be subject to a TCO. The instrument may be extended or further specified through subordinate instruments, although this particular TCO is limited to the goods explicitly mentioned in the application.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0411356 under the Customs Act 1901 (section 269P) declare that certain copper plates and/or sheets and/or strip are goods to which item 50 of Schedule 4 to the Tariff applies (section 269P(3)). The instrument was made on 7 January 2005 and it applies the rate of duty for these goods as 3%, down from the general rate of 5%. The instrument came into effect on 2 November 2004, the date on which the application was lodged (section 269S(1)).
The obligations imposed on the parties governed by this instrument include the requirement for Austral Wright Metals Pty Ltd to ensure their application for the Tariff Concession Order (TCO) met the core criteria as outlined in sections 269C and 269SJ of the Act. The Chief Executive Officer of Customs (CEO) must also publish a notice in the Gazette inviting any submissions from interested parties once the application is accepted as valid (section 269K(1)). In this case, no submissions were received. The CEO must then decide whether to make a TCO if the application meets the core criteria, which includes ensuring no substitutable goods were produced in Australia at the time of application (section 269C).
Under this instrument, if Austral Wright Metals Pty Ltd or any other party fails to comply with the requirements or obligations set out in the Customs Act 1901 or in the Tariff Concession Instrument, they could face penalties. Although specific penalties are not outlined in the explanatory statement, breaches of the Customs Act 1901 can result in substantial civil or criminal penalties. For instance, section 288 of the Customs Act 1901 provides for criminal penalties including fines and imprisonment for offences such as importing goods in contravention of the Act. Additionally, section 290 of the Act allows for civil penalties for breaches of the Act, which can include fines up to the maximum prescribed by the Act.
The Tariff Concession Instrument No. 0411356 provides for a reduced rate of customs duty on certain copper plates and/or sheets and/or strip, contingent upon the CEO being satisfied that the application meets the core criteria and that no substitutable goods were produced in Australia at the time of application. The CEO has the obligation to publish a notice in the Gazette and consider any submissions, though in this case, none were received. Any failure to comply with the requirements of the Customs Act 1901 or the terms of this instrument could result in significant penalties, including potential fines and imprisonment for criminal offences.