EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0411362
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 0411362 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. 0411362 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. 0411362, enacted under the Customs Act 1901, addresses the need for tariff concessions for specific goods not produced domestically. This instrument was introduced to facilitate lower rates of customs duty for certain imported goods, provided they meet the core criteria outlined in the Act. The Customs Act 1901, enacted by the Australian Parliament, aims to streamline the application process for tariff concessions and ensure that imports are managed effectively while supporting industry needs. The Tariff Concession Order (TCO) No. 0411362, issued on 7 January 2005, applies to specific plates, sheets, and strips, reducing their customs duty rate from 5% to 3%, thereby promoting fair trade practices and supporting economic activities.
Scope and Application
The Tariff Concession Instrument No. 0411362 applies to specific goods—certain plates, sheets, and strip—that are subject to a Tariff Concession Order (TCO) made under the Customs Act 1901. This Act applies to any person or entity seeking to import these goods into Australia. The geographic reach of the Act is national, as it pertains to customs duties and tariff concessions across the entire Commonwealth of Australia. The Act allows the Chief Executive Officer of Customs to grant tariff concessions if certain criteria are met, including the absence of substitutable goods produced in Australia. The TCO is effective from the date the application was lodged, 2 November 2004, as per the provisions of the Act. The instrument does not disadvantage any person or impose liabilities on anyone in respect of actions taken before its registration, and it does not affect the rights of any person other than the Commonwealth. Importers of the specified goods can benefit from this concession by applying for a refund of the higher duty paid before the TCO came into effect. The application and effect of the TCO may be further detailed or modified by subordinate instruments as necessary.
Key Provisions
The main operative sections of the Customs Act 1901, as applied to Tariff Concession Orders (TCOs), are found in Part XVA, particularly sections 269C, 269B, 269D, 269E, and 269P. Section 269C sets out the core criteria that an application must meet, primarily ensuring that no substitutable goods are being produced in Australia at the time the application is made. Section 269B defines key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods," which are essential for determining the eligibility of an application. Section 269D and Section 269E further elaborate on the definitions of "goods produced in Australia" and "ordinary course of business," respectively. Section 269P mandates the Chief Executive Officer (CEO) of Customs to make a written order if the application meets these criteria, thereby reducing the customs duty on the specified goods.
The Customs Act 1901 imposes several obligations on parties involved in the TCO process. Firstly, applicants, such as Austral Wright Metals Pty Ltd in this case, must ensure that their applications meet the core criteria stipulated in Section 269C. This involves demonstrating that no substitutable goods are produced in Australia, thereby justifying the need for a tariff concession. The CEO of Customs, on the other hand, is obligated to assess the application against these criteria and, if satisfied, to make a written order specifying the reduced duty rate. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties, although no submissions were received in this instance. Additionally, importers of the goods subject to a TCO are entitled to apply for a refund of duty on goods imported since the TCO is deemed to have come into force.
In terms of consequences for breach, the Customs Act 1901 does not explicitly outline specific offences, penalties, or consequences for non-compliance with TCO provisions. However, the Act does provide for general penalties under other sections, such as Section 230, which can apply to breaches of customs regulations. These penalties may include fines and imprisonment, depending on the severity of the breach. For example, a person found guilty of making a false statement in connection with a customs matter could face a maximum penalty of 10 years imprisonment or a fine of up to $220,000, or both, under Section 230(2) of the Act. Therefore, while the Act does not detail specific penalties for TCO non-compliance, it provides a framework for general penalties that could be applied in cases of significant breaches.