EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0411357
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 plates and/or sheets and/or strip on 2 November 2004.
Instrument
TCO No 0411357 was made on 7 January 2005. It declares that those certain 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. 0411357 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 Customs Act 1901 was enacted by the Australian Parliament to regulate the importation and exportation of goods and to collect customs duty. One of the mechanisms under the Customs Act for adjusting customs duty rates is the Tariff Concession Order (TCO), which applies reduced duty rates to specified goods. The Tariff Concession Instrument No. 0411357, enacted in 2005, is an example of such an order. It was introduced in response to an application by Austral Wright Metals Pty Ltd for a tariff concession on certain plates, sheets, and strips. The objective of this particular TCO is to provide a reduced duty rate for these goods, from the general rate of 5% to 3%, provided no substitutable goods are produced in Australia. The instrument was made effective from 2 November 2004, the date of the application, and no objections were raised during the public consultation period. This TCO ensures that importers of the specified goods can benefit from the reduced duty rate and potentially apply for duty refunds on imports made since the effective date.
Scope and Application
The Tariff Concession Instrument No. 0411357, pursuant to Part XVA of the Customs Act 1901, applies to entities or individuals who seek to import specific goods and are seeking a concession on the customs duty applicable to these goods. The act primarily targets importers and businesses involved in the importation of goods specified in the Instrument, ensuring they can benefit from the reduced duty rate outlined within the TCO. The scope of the Act is national, operating under the overarching authority of the Commonwealth. However, it directly affects the rights and obligations of those importing the specified goods into Australia. The Act does not specify any exclusions or exemptions other than those goods listed in section 269SJ of the Customs Act 1901, which inherently cannot be subject to a Tariff Concession Order. The application of the TCO is contingent on the CEO of Customs determining that no substitutable goods are produced in Australia at the time of the application. The TCO does not disadvantage any person or impose liabilities for actions taken prior to its registration date.
Key Provisions
The main operative sections of this legislation are sections 269C, 269F, and 269P of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods, while section 269C 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. If the CEO is satisfied that the application meets the core criteria, they 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 applies, as per section 269P(3). In this instance, TCO No. 0411357 was made on 7 January 2005, and it declares that certain 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 Act imposes several obligations and requirements on the parties it governs. Firstly, any person who wishes to apply for a TCO must do so in accordance with section 269F. The CEO must then decide whether the application meets the core criteria set out in section 269C. If the CEO is satisfied that the application meets the criteria, they 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 applies, as per section 269P(3). Additionally, as per subsection 269K(1) of the Act, the CEO must publish a notice in the Gazette inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. In this instance, the CEO did not receive any submissions in response to this invitation.
The Customs Act 1901 provides for various offences, penalties, and civil/criminal consequences for breaches of its provisions. However, the Explanatory Statement does not provide specific information on the penalties for breaches of the Act in relation to TCOs. It is important to note that failure to comply with the Act's provisions may result in legal consequences, including fines and/or imprisonment, depending on the nature and severity of the breach. In the case of TCOs, failure to comply with the Act's provisions may result in the imposition of customs duty at the general rate, rather than the reduced rate specified in the TCO.
In summary, the Customs Act 1901 sets out a scheme under which Tariff Concession Orders may be made by the Chief Executive Officer of Customs. The Act imposes obligations and requirements on the parties it governs, including the obligation to apply for a TCO in accordance with section 269F, and the requirement for the CEO to decide whether the application meets the core criteria set out in section 269C. Failure to comply with the Act's provisions may result in legal consequences, including fines and/or imprisonment, depending on the nature and severity of the breach.