EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0411358
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 0411358 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. 0411358 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, enacted by the Australian Parliament, established a framework for the imposition of customs duty on imported goods. One aspect of this legislation involves Tariff Concession Orders (TCOs), which allow for lower rates of customs duty on certain goods under specific conditions. Enacted in 1901, the Customs Act provides a mechanism through which individuals or entities can apply to the Chief Executive Officer of Customs for a TCO if they believe the goods in question meet the core criteria. The core criteria, outlined in section 269C of the Act, require that no substitutable goods are produced in Australia at the time the application is lodged. The purpose of this legislative instrument is to ensure that the imposition of customs duty does not unfairly disadvantage importers or producers by providing a pathway for tariff concessions that can benefit the economy by making certain imported goods more competitively priced.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework through which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs. This legislation applies to entities and individuals seeking a lower rate of customs duty for goods they import. The Act allows for applications to the CEO for TCOs in respect of goods, provided those goods are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. For an application to be successful, it must meet the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The scope of the Act is national, as it is a Commonwealth Act, but its effects are felt in the importation industry where reduced tariff rates are applicable to the goods specified in a TCO. The Act does not specify exclusions, exemptions, or thresholds beyond those mentioned; however, it does allow for the possibility of subordinate instruments to further define or refine the application of TCOs.
Key Provisions
The Customs Act 1901, specifically Part XVA, outlines the process for creating Tariff Concession Orders (TCOs) through which a lower rate of customs duty can be applied to certain goods. An application for a TCO can be made under section 269F, provided the goods are not those specified in section 269SJ which are ineligible for such concessions. The Chief Executive Officer of Customs (CEO) must assess if the application meets the core criteria, which are defined in sections 269B, 269C, 269D, and 269E. For example, if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, the CEO must proceed to make the TCO as per section 269P(3).
The obligations imposed by the Customs Act on the parties involved are primarily on the CEO, who must assess applications for TCOs against the core criteria and make a decision based on these assessments. If the CEO determines that the application meets the criteria, a written order must be issued, effectively reducing the customs duty rate for the specified goods. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties and consider these submissions before making a final decision. For instance, in the case of TCO No. 0411358, which was issued for certain plates and/or sheets and/or strip, the CEO confirmed that no substitutable goods were produced in Australia, thereby satisfying the core criteria.
Breaching the provisions of the Customs Act, particularly in relation to the incorrect application or misuse of TCOs, can result in significant legal consequences. The Act does not explicitly detail the penalties for breaches, but penalties for non-compliance with customs laws generally can include fines and imprisonment. In cases involving fraud or significant economic impact, the penalties can be severe. For example, under section 278 of the Customs Act, penalties for evading duty can result in fines up to 10,000 penalty units or imprisonment for up to five years, or both. Similarly, knowingly making false statements or documents can lead to fines up to 5,000 penalty units or imprisonment for up to two years, or both.
In the specific case of TCO No. 0411358, the CEO did not receive any submissions opposing the TCO, indicating that the process was transparent and any potential objections were considered and dismissed. The TCO came into effect on the day the application was lodged, 2 November 2004, and does not retroactively affect the rights of any party except to provide benefits such as duty refunds to importers of the specified goods since that date. The Act ensures that no person, other than the Commonwealth, is disadvantaged or imposed liabilities for actions taken before the TCO was registered.