EXPLANATORY STATEMENT
Tariff Concession Instrument No.0502282
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.
Comalco Aluminium (Bell Bay) Ltd applied for a TCO in respect of certain bimetal transition joints on 21 February 2005.
Instrument
TCO No 0502282 was made on 6 May 2005. It declares that those certain bimetal transition joints 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. 0502282 is taken to have come into force on 21 February 2005.
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, addresses the issue of facilitating trade by providing a scheme for Tariff Concession Orders (TCOs). These orders allow for a lower rate of customs duty on specific goods, provided that certain criteria are met, primarily that no substitutable goods are produced in Australia. The Tariff Concession Instrument No. 0502282, made on 6 May 2005, is an example of this scheme in action. It grants a concession for certain bimetal transition joints, reducing the duty rate from 5% to 3%. The process involves an application by interested parties, review by the Chief Executive Officer of Customs, and publication in the Gazette for public comment, although in this case, no submissions were received. The instrument aims to benefit importers by potentially allowing them to apply for a refund of duty on goods imported since the effective date of the order, while ensuring that no existing rights or liabilities are adversely affected.
Scope and Application
The Customs Act 1901, through Part XVA, governs the scheme for Tariff Concession Orders (TCOs) and applies to goods for which a TCO can be applied. This Act allows the Chief Executive Officer of Customs to make a TCO, which results in a lower rate of customs duty for the specified goods. A TCO can be applied for by any person, provided the goods in question are not specified in section 269SJ of the Act as ineligible for a TCO. The application must meet core criteria as stipulated in section 269C, which includes the condition that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The TCO has a national jurisdictional reach, applying across Australia. The Explanatory Statement for Instrument No. 0502282 specifies that it came into force on the date the application was lodged, 21 February 2005, and does not affect any pre-existing rights or impose liabilities for actions taken before its registration.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0502282 pertain to the granting of a Tariff Concession Order (TCO) under section 269F of the Customs Act 1901 (section 269F). The process begins when a person applies to the Chief Executive Officer of Customs (CEO) for a TCO concerning specific goods. If the CEO determines that the goods are not prohibited under section 269SJ of the Act and that the application meets the core criteria outlined in section 269C, the CEO is obligated to issue a TCO. Section 269P(3) further mandates that the TCO must specify a prescribed item of Schedule 4 to the Customs Tariff Act 1995, thereby applying a reduced rate of customs duty to the goods. In the specific case of Comalco Aluminium (Bell Bay) Ltd, a TCO was issued for certain bimetal transition joints, reducing the duty rate from 5% to 3%.
The obligations imposed by this Act on the parties or entities it governs primarily revolve around the application process and the conditions under which a TCO can be issued. The CEO must ensure that the application is valid and meets the core criteria, including verifying that no substitutable goods are produced in Australia as per section 269C. Additionally, the CEO is required to publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made, as outlined in subsection 269K(1). Failure to adhere to these obligations could potentially render the TCO invalid.
The Act also outlines consequences for any breaches of its provisions. While the Explanatory Statement does not explicitly detail the penalties for non-compliance, it is understood that breaches of the Customs Act 1901 can result in both civil and criminal penalties. For instance, section 237 of the Act provides for fines of up to 10,000 penalty units or imprisonment for up to 10 years for serious breaches. Additionally, subsection 269S(1) ensures that the TCO does not disadvantage any person by affecting their rights or imposing liabilities for actions taken before the TCO's effective date. Therefore, any improper issuance of a TCO could lead to significant legal repercussions for the CEO or the applying entity.