EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0508312
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.
Greif Australia Pty Limited applied for a TCO in respect of certain steel drum flanges on 27 June 2005.
Instrument
TCO No 0508312 was made on 9 September 2005. It declares that those certain steel drum flanges 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 free.
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. 0508312 is taken to have come into force on 27 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 Customs Act 1901 was amended to introduce the Tariff Concession Orders (TCO) scheme through Part XVA, which allows the Chief Executive Officer of Customs to apply tariff concessions to certain goods. Enacted by the Australian Parliament, this legislative instrument addresses the problem of ensuring fair trade practices by providing reduced customs duty rates for goods where there are no Australian-produced alternatives. The explanatory statement for Instrument No. 0508312, made on 9 September 2005, details the process undertaken by Greif Australia Pty Limited to apply for a TCO for certain steel drum flanges. Following the application on 27 June 2005, the CEO determined that no substitutable goods were produced in Australia, meeting the core criteria under the Act. Consequently, the TCO was issued, granting a tariff concession that reduced the duty rate from 5% to free for these specific steel drum flanges, effective from the date of the application. The policy objective is to facilitate trade by reducing the cost of imported goods, thereby benefiting importers who can apply for duty refunds on eligible goods.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for Tariff Concession Orders (TCOs) that can be made by the Chief Executive Officer of Customs (CEO) to provide a lower rate of customs duty on certain goods. This Act applies to any individual or entity that may apply for a TCO, particularly importers and exporters who wish to benefit from reduced customs duty rates on goods specified in a TCO. The application process requires the CEO to assess whether the goods in question meet the core criteria, which includes ensuring that no substitutable goods are produced in Australia in the ordinary course of business. The geographic and jurisdictional reach of this Act is national, as it applies across Australia under the Commonwealth’s authority. The Act does not impose any liabilities on individuals or entities other than the Commonwealth and does not affect existing rights or impose new liabilities for actions taken prior to the registration of a TCO. The scope of this Act may be extended or restricted through subordinate instruments, which are subject to consultation and publication requirements as stipulated within the Act.
Key Provisions
The key operative sections of the Customs Act 1901, as applied in Tariff Concession Instrument No. 0508312, require the Chief Executive Officer of Customs (CEO) to make a Tariff Concession Order (TCO) if an application meets the core criteria specified in section 269C (1). This is predicated on the CEO being satisfied that, at the time of application, no substitutable goods were produced in Australia in the ordinary course of business, as defined in sections 269D and 269E. The TCO application process is further governed by sections 269F and 269SJ, which outline the eligibility criteria and ineligible goods for a TCO, respectively. Once the CEO determines that the core criteria are met, they must issue a written order under section 269P(3) specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question.
The obligations imposed on the parties by the Act include the requirement for the CEO to publish a notice in the Gazette inviting submissions from any person who may have reasons why the TCO should not be made, as stipulated in section 269K(1). Greif Australia Pty Limited, as the applicant, must provide sufficient evidence to meet the core criteria for the TCO. Additionally, the CEO must ensure that the TCO does not disadvantage any person or impose liabilities on any person for actions taken prior to the registration of the TCO, as per subsection 269S(1). This ensures that the TCO's implementation does not retroactively affect the rights of any individual or entity.
Offences and penalties under the Customs Act 1901 are not explicitly detailed in the explanatory statement. However, failure to comply with the requirements set out in the Act, including providing misleading information in a TCO application, could potentially lead to legal consequences. The penalties for such breaches could range from fines to imprisonment, depending on the severity of the offence. The specific penalties are determined by the relevant sections of the Customs Act 1901 and could include civil or criminal sanctions as deemed appropriate by the courts. The Act provides a framework within which these penalties are applied, ensuring that breaches are addressed appropriately.