EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0411761
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.
Atlas Steels Australia Pty Ltd applied for a TCO in respect of certain tubes or hollow bars on 9 November 2004.
Instrument
TCO No 0411761 was made on 21 January 2005. It declares that those certain tubes or hollow bars 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. 0411761 is taken to have come into force on 9 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 to provide for the administration of customs and excise duties and related matters, establishing a framework for the regulation of imported and exported goods. The Tariff Concession Instrument No. 0411761, introduced in 2005, addresses the specific issue of tariff concessions for certain goods by allowing the Chief Executive Officer of Customs to reduce the duty rate for goods that meet the specified criteria. This instrument was introduced to facilitate smoother trade and reduce costs for importers of specified goods. The policy objective is to encourage trade by providing tariff relief where it is deemed that no substitutable goods are produced in Australia, thereby enhancing economic efficiency and competitiveness. The instrument was enacted by the relevant legislature to streamline the process of applying for and granting tariff concessions, ensuring that the application aligns with the core criteria set out in the Customs Act 1901.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), who is mandated to consider applications for tariff concessions on imported goods. This legislation applies to individuals and entities, such as Atlas Steels Australia Pty Ltd, that apply for tariff concessions on specific goods, provided that the goods in question do not fall under the exclusions stipulated in section 269SJ of the Act. The Act applies nationally across Australia, as it is a Commonwealth Act, and its reach is not limited by state or territory boundaries. The Act stipulates that a TCO can only be granted if the CEO determines that no substitutable goods are produced in Australia at the time of the application, thereby ensuring that such concessions do not undermine local production. The application of this Act can be further detailed through subordinate instruments, although the primary scope and conditions for issuing TCOs are outlined within the Act itself.
Key Provisions
The key sections of the Tariff Concession Instrument No. 0411761 under the Customs Act 1901 (section 269C) require the Chief Executive Officer of Customs (the CEO) to consider whether a Tariff Concession Order (TCO) should be made for specific goods if no substitutable goods are produced in Australia. If the CEO determines that the application meets the core criteria (section 269F), they must make a written order declaring that the goods in question are subject to a lower rate of customs duty, as specified in the order (section 269P(3)). This particular instrument, TCO No. 0411761, applies to certain tubes or hollow bars, reducing their duty rate from the general 5% to a concessional 3%.
The Act imposes several obligations on the parties involved. The applicant, such as Atlas Steels Australia Pty Ltd in this case, must submit an application to the CEO for a TCO, ensuring that it complies with the criteria outlined in section 269C. The CEO, upon receiving the application, has a duty to evaluate it against the specified criteria and make a decision based on whether the goods can be considered substitutable or if they are produced in Australia in the ordinary course of business (section 269B, 269D, 269E). Additionally, the CEO must publish a notice in the Gazette, inviting any interested parties to lodge submissions if they believe the TCO should not be made (section 269K(1)). In this instance, no submissions were received, which facilitated the process.
The legislation also outlines potential consequences for non-compliance. While the explanatory statement does not specify any offences or penalties directly linked to the TCO itself, breaches of the Customs Act 1901 or the associated regulations could result in civil or criminal penalties. For example, under section 126 of the Customs Regulations 1995, there are provisions for penalties related to incorrect declarations or fraud, which might apply indirectly to the context of TCOs. The maximum penalties for breaches of the Customs Act can include fines and imprisonment, depending on the severity of the offence.
The TCO does not disadvantage any person's rights as they stood on the date of the application's registration, nor does it impose any new liabilities on individuals other than the Commonwealth (subsection 269S(1)). However, it does confer benefits on importers of the affected goods by allowing them to apply for refunds of duty on goods imported since the effective date of the TCO (paragraph 126(1)(r) of the Regulations). This ensures that the rights of importers are positively affected while providing them with an opportunity to reclaim any overpaid duties.