EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0509809
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.
Mid Continent Equipment (Australia) Pty Ltd applied for a TCO in respect of certain electric resistance welded steel cylinders on 25 July 2005.
Instrument
TCO No 0509809 was made on 14 October 2005. It declares that those certain electric resistance welded steel cylinders 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. 0509809 is taken to have come into force on 25 July 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 enacted to provide a framework for the regulation of customs and excise in Australia, and it includes provisions for the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation was introduced to address the need for a mechanism to grant tariff concessions on imported goods under specific circumstances, such as when no substitutable goods are produced in Australia. The Tariff Concession Instrument No. 0509809 was made under this Act, declaring that certain electric resistance welded steel cylinders would be subject to a zero rate of duty, as no substitutable goods were produced in Australia. The instrument was introduced following an application by Mid Continent Equipment (Australia) Pty Ltd and came into force on 25 July 2005. The policy objective of this instrument is to provide relief to importers of these specific goods, thereby encouraging trade and potentially lowering the cost of these goods in the Australian market.
Scope and Application
The Tariff Concession Instrument No. 0509809 under the Customs Act 1901 applies to specific electric resistance welded steel cylinders that were the subject of an application by Mid Continent Equipment (Australia) Pty Ltd. This instrument operates within the Commonwealth jurisdiction and specifically addresses the tariff concessions for the listed goods. The instrument is applicable to entities and individuals involved in the import of these goods, thereby directly affecting the importers who stand to benefit from the concession. The scope of the Act encompasses the application process whereby the Chief Executive Officer of Customs evaluates whether the goods qualify for a tariff concession order, provided that no substitutable goods are produced in Australia at the time of application. Any exclusions or exemptions are outlined in section 269SJ of the Act, which specifies goods that are ineligible for tariff concessions. The Act extends its application through subordinate instruments such as the Customs Tariff Act 1995, which further defines the tariff rates and the specific goods covered by the concession.
Key Provisions
The main operative sections of this Tariff Concession Instrument (TCO) are sections 269C, 269B, 269D, 269E, and 269P of the Customs Act 1901 (the Act). Section 269C outlines the core criteria for the Chief Executive Officer of Customs (the CEO) to consider when determining whether to grant a Tariff Concession Order (TCO) for certain goods, which is the primary focus of this legislation. Section 269B defines the terms ‘goods produced in Australia’, ‘ordinary course of business’ and ‘substitutable goods’. Section 269D provides further detail on what constitutes goods produced in Australia, section 269E defines ordinary course of business and section 269P(3) requires the CEO to make a written order (the TCO) if the application meets the core criteria. These sections collectively ensure that the TCO process is transparent and based on specific criteria.
The Act imposes several obligations and requirements on the parties involved. Firstly, any person seeking a TCO must apply to the CEO under section 269F. The CEO is then required to determine if the application is for goods that cannot be subject to a TCO, as specified in section 269SJ. If the CEO is satisfied that the application is valid and the core criteria in section 269C are met, the CEO must make a TCO as per section 269P(3). Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be granted, as per section 269K(1). Failure to follow these steps accurately could result in the TCO being legally challenged or not being granted.
The legislation also outlines potential consequences for non-compliance. While the explanatory statement does not detail specific offences or penalties within the Act itself, it is implied that failure to adhere to the requirements for applying for and granting a TCO could lead to legal challenges. Although no specific maximum penalties are mentioned in the explanatory statement, non-compliance with the Customs Act 1901 generally could result in fines or other civil or criminal penalties as prescribed by the Act. The consequences could include financial penalties for incorrect duty payments or legal action for procedural failures, depending on the nature and severity of the breach.