EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0411361
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 0411361 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. 0411361 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 Parliament of Australia, establishes a framework within which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs. The Act aims to address the problem of ensuring that certain imported goods receive preferential tariff treatment under specific conditions. The process involves an application for a TCO by an interested party, subject to the core criteria outlined in the Act, particularly the absence of substitutable goods produced in Australia. The policy objective is to encourage the importation of goods that are not domestically produced, thereby supporting industries where local production is not feasible or economically viable. The Tariff Concession Instrument No. 0411361, issued on 7 January 2005, exemplifies this mechanism by granting Austral Wright Metals Pty Ltd a concession on the duty for certain plates and/or sheets and/or strip, reducing the duty rate from 5% to 3%. This instrument came into force on the date the application was lodged, 2 November 2004, and does not impose any liabilities on any person, while potentially benefiting importers by allowing them to apply for duty refunds on goods imported since the TCO's effective date.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines the process for Tariff Concession Orders (TCOs) which reduce the customs duty on certain goods. This Act applies to any person who may apply for a TCO, which is a process overseen by the Chief Executive Officer of Customs (CEO). The application must meet the core criteria set out in the Act, particularly that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The Act applies to all entities and individuals involved in the importation of goods that are subject to a TCO. The geographic reach of the Act is national, as it pertains to customs and imports across Australia. Notably, the Act excludes certain goods from being subject to a TCO, as specified in section 269SJ. Additionally, the Act can be further defined or extended through subordinate instruments, which may include regulations or further orders that specify detailed operational procedures or additional criteria. The Tariff Concession Instrument No. 0411361, which was made on 7 January 2005, demonstrates the application of these principles in a specific case involving Austral Wright Metals Pty Ltd and certain plates, sheets, and strips, reducing the duty rate from 5% to 3%.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 0411361, pertain to the Customs Act 1901 (sections 269C, 269B, 269D, 269E, 269P, and 269SJ). Section 269F outlines the process by which an application for a Tariff Concession Order (TCO) can be submitted to the Chief Executive Officer of Customs (CEO), provided the goods in question do not fall under the restricted list stipulated in section 269SJ. If the CEO determines that the application meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged, they must issue a TCO. The TCO then specifies a lower rate of customs duty for the goods in question, as determined by the relevant item in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties or entities it governs include ensuring that any TCO application submitted is valid and meets the core criteria. The CEO is required to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made, as per subsection 269K(1). Additionally, the CEO must ensure that any TCO made is in accordance with the provisions of the Customs Act 1901 and does not disadvantage any person other than the Commonwealth. The TCO, once made, applies to the goods from the date the application was lodged, as per subsection 269S(1).
In terms of consequences for breach, the legislation does not explicitly detail criminal or civil penalties for non-compliance with the TCO provisions. However, any failure to adhere to the core criteria for a TCO application could result in the CEO declining to issue the TCO, thereby leaving the goods subject to the general rate of duty. Furthermore, any subsequent misuse of a TCO, such as claiming concessions on goods that do not qualify, could result in legal action under the relevant provisions of the Customs Act 1901, potentially leading to fines or other penalties as prescribed by law.