EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0507513
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.
CMI Operations Pty Ltd applied for a TCO in respect of certain Annealed Steel Strips on 17 June 2005.
Instrument
TCO No 0507513 was made on 2 September 2005. It declares that those certain Annealed Steel Strips 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 0%.
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. 0507513 is taken to have come into force on 17 June 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 Tariff Concession Instrument No. 0507513, made under the Customs Act 1901, was enacted to provide a concession on the tariff for certain Annealed Steel Strips, addressing the gap where such goods would otherwise attract a higher rate of customs duty. This instrument was introduced to facilitate trade by reducing the duty on these goods, thereby potentially lowering costs for importers and encouraging trade. The instrument was made by the Chief Executive Officer of Customs following an application by CMI Operations Pty Ltd on 17 June 2005. The policy objective, as outlined in the explanatory statement, was to ensure that if no substitutable goods were produced in Australia, a tariff concession could be granted. The instrument came into effect on the date of the application, 17 June 2005, and no submissions opposing the concession were received during the consultation period.
Scope and Application
The Tariff Concession Instrument No. 0507513 under the Customs Act 1901 applies to entities or individuals who seek tariff concessions for specific goods, in this case Annealed Steel Strips, and pertains to the import duties on these goods. The geographic reach of this Act is national, as it is administered by the Commonwealth through the Chief Executive Officer of Customs. The application of this instrument is limited to goods specified in the application, and it does not affect any pre-existing rights or liabilities of parties except for the Commonwealth. The process for tariff concessions is initiated when an entity like CMI Operations Pty Ltd applies for a Tariff Concession Order (TCO) which, if approved by the CEO, results in a specified lower rate of customs duty for the goods in question. The instrument was made effective from the date of application, 17 June 2005, and no submissions opposing the TCO were received during the consultation period.
Key Provisions
The Tariff Concession Instrument No. 0507513 under the Customs Act 1901 allows the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCOs) that reduce customs duty rates on certain imported goods (ss. 269C, 269F, 269SJ). To qualify, the goods must not have substitutable products produced in Australia (s. 269C). The CEO must make a written TCO if the application meets these criteria, specifying the applicable item from the Customs Tariff Act 1995 (s. 269P(3)). In this case, CMI Operations Pty Ltd successfully applied for a TCO for certain Annealed Steel Strips, resulting in a duty rate of 0% instead of the general 5% (s. 269P(3)).
The CEO has obligations under the Customs Act to process TCO applications properly and consider submissions from interested parties. After accepting a valid application, the CEO must publish a notice in the Gazette inviting submissions and consider them before making a decision (s. 269K(1)). In this case, no submissions were received in response to the published notice. The TCO is effective from the date the application was lodged, which is 17 June 2005 (s. 269S(1)).
Importers of the specified goods are entitled to a refund of any duties paid since the TCO came into effect, under paragraph 126(1)(r) of the Regulations. However, the TCO does not impose any liabilities or affect the rights of persons other than the Commonwealth in respect of actions taken before the TCO was registered (s. 269S(1)).
The Customs Act does not explicitly outline offences or penalties for breaches related to TCOs, but general provisions regarding customs duty and the Act apply. For example, fraudulent misrepresentation or concealment to evade duty could lead to criminal charges under sections 255 and 256 of the Act, with penalties including fines and imprisonment. The specific penalties for breaches depend on the nature of the offence but could include fines up to $22,200 or imprisonment for up to 5 years, or both, for serious offences (s. 255, 256).