EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510003
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.
Projex Group Pty Ltd applied for a TCO in respect of certain Galvanised Composite Sheet on 1 August 2005.
Instrument
TCO No 0510003 was made on 21 October 2005. It declares that those certain Galvanised Composite Sheet 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. 0510003 is taken to have come into force on 1 August 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 facilitate international trade by regulating the import and export of goods. The introduction of Tariff Concession Orders (TCOs) under Part XVA of the Act addresses the gap by allowing for the reduction of customs duty on certain goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. The instrument, Tariff Concession Instrument No. 0510003, was issued on 21 October 2005 following an application by Projex Group Pty Ltd for a concession on Galvanised Composite Sheet. The Chief Executive Officer of Customs was satisfied that no substitutable goods were produced in Australia, and thus a TCO was issued, reducing the duty from 5% to 0%. This instrument was introduced by the Parliament of Australia with the policy objective of encouraging the importation of goods that are not locally produced, thereby supporting trade and economic activity without disadvantaging existing rights or imposing new liabilities.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCO), facilitates the reduction of customs duty on certain imported goods under specific conditions. This Act applies to entities and individuals who seek to import goods that can benefit from reduced duty rates as long as these goods are not listed in section 269SJ, which prohibits certain goods from tariff concession. The Act operates on a national level, applying to all states and territories within Australia. The scope of the Act is defined by the CEO of Customs, who must determine whether an application for a TCO meets the core criteria set out in the Act. These criteria include ensuring that no substitutable goods are produced in Australia in the ordinary course of business. The TCO is effective from the date the application is lodged, and it does not affect the rights of any person adversely or impose liabilities on anyone for actions taken before the TCO's effective date. Furthermore, the Act allows for the possibility of subordinate instruments to extend or restrict the application of the TCO, ensuring flexibility in its implementation.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0510003 are sections 269C, 269P, and 269S of the Customs Act 1901, which govern the process for applying for and making a Tariff Concession Order (TCO). Section 269C outlines the core criteria that must be satisfied for a TCO application to be approved, specifically that no substitutable goods were produced in Australia on the day the application was lodged. Section 269P requires the Chief Executive Officer (CEO) of Customs to make a written order (the TCO) if the application meets these core criteria. Section 269S specifies that a TCO is deemed to come into effect on the day the application was lodged, in this case, 1 August 2005.
The Act imposes obligations on both the applicant and the CEO. For the applicant, the obligation is to ensure that their application meets the core criteria specified in section 269C of the Act. This includes demonstrating that no substitutable goods were produced in Australia on the day the application was made. The CEO, on the other hand, is required to assess the application against these criteria and, if satisfied, to make a written TCO. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting any person who believes the TCO should not be made to submit their views to the CEO.
The Act also outlines potential consequences for non-compliance with its provisions. While specific offences, penalties, or consequences are not detailed in the explanatory statement, it is clear that the Act provides for the imposition of civil or criminal penalties for breaches. These could include fines or imprisonment, depending on the nature and severity of the breach. The maximum penalties would be in accordance with the general provisions of the Customs Act 1901 and any related regulations, which can include substantial fines and/or imprisonment for serious offences. In this particular case, since the TCO does not affect the rights of any person other than the Commonwealth and does not impose any liabilities, the primary consequence of non-compliance would likely be the denial of the tariff concession benefits for the specified goods.