EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0411812
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.
Cascade Australia Pty Ltd applied for a TCO in respect of certain alloy steel profiles on 5 November 2004.
Instrument
TCO No 0411812 was made on 7 January 2005. It declares that those certain alloy steel profiles 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. 0411812 is taken to have come into force on 5 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. 0411812 was enacted in 2005 under the Customs Act 1901 to address the need for a more flexible tariff system that could respond to specific economic circumstances. This instrument, which was authorised by the Parliament of Australia, allows the Chief Executive Officer of Customs to reduce the rate of customs duty on certain goods if it is determined that these goods are not produced domestically and that there are no suitable substitutes available. The policy objective of this legislation is to encourage the importation of goods that are not manufactured locally, thereby supporting economic efficiency and competitiveness by lowering the cost of these goods for businesses and consumers.
Following an application from Cascade Australia Pty Ltd for tariff concessions on certain alloy steel profiles, the CEO found that the conditions for a Tariff Concession Order (TCO) were met, as no substitutable goods were being produced in Australia. Consequently, TCO No. 0411812 was issued, reducing the duty on these alloy steel profiles from the general rate of 5% to 3%. The order came into effect on the date the application was lodged, 5 November 2004, and no submissions opposing the order were received. This measure is expected to benefit importers by potentially allowing them to claim refunds for duties paid on imports of these goods since the effective date of the TCO, without imposing any new liabilities.
Scope and Application
The Customs Act 1901 applies to any person or entity seeking tariff concessions on imported goods, specifically those applying for Tariff Concession Orders (TCOs). This Act operates under the Commonwealth jurisdiction and impacts the importation of goods by reducing the duty rates for certain items as specified in Schedule 4 of the Customs Tariff Act 1995. The application process involves the Chief Executive Officer of Customs assessing whether the goods in question are substitutable by Australian-produced goods and whether they meet the core criteria set out in the Act. Notably, goods specified in section 269SJ of the Act are ineligible for TCOs. The TCOs themselves are effective from the date the application is lodged and do not retroactively affect any rights or impose liabilities on persons other than the Commonwealth. This means that while importers of the affected goods can benefit from the reduced duty rates, they are not liable for any duties paid before the TCO's effective date.
Key Provisions
The main operative sections of this legislation are sections 269C, 269B, 269D, 269E, 269P, and 269S. Section 269C stipulates that a Tariff Concession Order (TCO) application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269B defines the terms ‘goods produced in Australia,’ ‘ordinary course of business,’ and ‘substitutable goods.’ Section 269D provides the meaning of ‘goods produced in Australia,’ section 269E gives the meaning of ‘ordinary course of business,’ and section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that a TCO application meets the core criteria, they must make a written order (a TCO). Section 269S(1) provides that a TCO is taken to have come into force on the day the application for the TCO was lodged.
The Act imposes several obligations and requirements on the parties and entities it governs. The CEO must decide whether a TCO application meets the core criteria as outlined in section 269C, which involves determining if no substitutable goods were produced in Australia in the ordinary course of business. Once satisfied, the CEO must make a written TCO as per section 269P(3). Section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. The Act also ensures that the TCO does not affect the rights of a person, other than the Commonwealth, to disadvantage that person or impose liabilities on them for actions taken before the date of registration. It also provides for the rights of importers to be beneficially affected.
The legislation does not explicitly state any offences, penalties, or civil/criminal consequences for breaches. However, any failure to comply with the requirements of the TCO or the Customs Act 1901 could potentially lead to legal consequences under the broader customs and trade legislation, which may include fines, imprisonment, or other penalties as prescribed by law. The absence of specific penalties in this instrument does not diminish the seriousness of adhering to the statutory requirements.