EXPLANATORY STATEMENT
Tariff Concession Instrument No.0413053
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.
Valbruna Australia Pty Ltd applied for a TCO in respect of certain billets or blooms on 29 November 2004.
Instrument
TCO No 0413053 was made on 4 February 2005. It declares that those certain billets or blooms 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. 0413053 is taken to have come into force on 29 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, provides a framework for the administration of customs duties and the regulation of imported goods. The Act was introduced to address the need for a structured approach to managing customs duties and facilitating trade. Specifically, Part XVA of the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, enabling the application of lower customs duty rates for certain goods. This mechanism aims to support industries by reducing costs on imported goods that do not have local substitutes, thereby promoting competitive markets and economic growth. The explanatory statement for Tariff Concession Instrument No. 0413053, issued under the Customs Act 1901, details the process for granting a TCO to Valbruna Australia Pty Ltd for certain billets or blooms, resulting in a reduced duty rate from 5% to 3%. The instrument was issued following a successful application and no objections from the public, and it came into effect on the date of application, 29 November 2004.
Scope and Application
The Customs Act 1901 applies to the process of applying for and receiving Tariff Concession Orders (TCOs) for goods, where a lower rate of customs duty is applicable. The Act pertains to any person or entity seeking to import goods that are not produced in Australia in the ordinary course of business, thereby meeting the core criteria set out in section 269C of the Act. The scope of the legislation extends across the Commonwealth of Australia, as it involves the federal government's customs duties and tariff concessions. The Act excludes certain goods specified in section 269SJ, which cannot be subject to a TCO. The application process includes an invitation for public submissions, as mandated by section 269K(1) of the Act, although no submissions were received for TCO No. 0413053. The TCO itself does not disadvantage or impose liabilities on persons other than the Commonwealth, and it does not affect rights as at the date of registration concerning actions taken prior to the TCO's effective date.
Key Provisions
The Tariff Concession Instrument No. 0413053, made under the Customs Act 1901, sets forth the conditions for a tariff concession order (TCO) regarding certain billets or blooms. Section 269F of the Act allows an application for a TCO to be made by a person to the Chief Executive Officer of Customs (CEO), provided the goods in question are not excluded under section 269SJ. The CEO must then determine if the application meets the core criteria set out in section 269C, which include ensuring that no substitutable goods were produced in Australia on the day the application was lodged. If the CEO is satisfied that these criteria are met, they must issue a TCO as per section 269P(3), which specifies the prescribed tariff item under the Customs Tariff Act 1995 that applies to the goods.
The obligations imposed by this Act on parties and entities include ensuring that any application for a TCO is made in accordance with the statutory requirements. The CEO has a duty to assess whether the application meets the criteria, particularly focusing on whether substitutable goods were produced in Australia. The CEO must also publish a notice in the Gazette under section 269K(1) inviting submissions from any person who might oppose the TCO, although in this case, no submissions were received. Furthermore, the TCO itself imposes no liabilities on any person other than the Commonwealth and does not affect any pre-existing rights or impose liabilities for actions taken prior to the TCO’s registration date.
In terms of penalties and consequences for breach, the Act does not explicitly detail specific penalties for non-compliance with the TCO provisions. However, any breaches of the Customs Act 1901 or Customs Tariff Act 1995, which underpin the TCO process, could lead to civil or criminal penalties. Under section 277 of the Customs Act, penalties for contraventions can include fines and imprisonment. The severity of these penalties depends on the nature and extent of the breach, with maximum penalties potentially reaching substantial fines and imprisonment terms as specified in the relevant sections of the Act. Given the integral role of TCOs in facilitating trade, adherence to the legislative framework is crucial to avoid such repercussions.