EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510518
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.
Primary Metals and Alloys Pty Ltd applied for a TCO in respect of certain copper bars and/or rods and/or profiles on 10 August 2005.
Instrument
TCO No 0510518 was made on 04 November 2005. It declares that those certain wheel bolts 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. 0510518 is taken to have come into force on 10 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, as amended, introduces a framework for the implementation of Tariff Concession Orders (TCOs) through Part XVA, addressing the need for a streamlined process to reduce customs duty rates on specified goods. Enacted by the Parliament of Australia, this legislation aims to facilitate trade by allowing the Chief Executive Officer of Customs to grant tariff concessions on goods, provided that certain criteria are met and no substitutable goods are produced in Australia. The Tariff Concession Instrument No. 0510518, issued on 4 November 2005, exemplifies this process by applying a zero duty rate to certain copper bars and/or rods and/or profiles, which had a general duty rate of 5%. The policy objective is to support Australian industries by ensuring that tariff concessions are granted only when no equivalent domestic production exists, thereby promoting fair competition and economic efficiency.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for Tariff Concession Orders (TCO) that the Chief Executive Officer of Customs (CEO) may implement to allow for a lower rate of customs duty on certain goods. These TCOs apply to goods specified in an application if the CEO determines that no substitutable goods were produced in Australia at the time of the application, as outlined in section 269C. The CEO is mandated to make a written order, a TCO, if the application meets these core criteria and does not involve goods specified in section 269SJ, which are ineligible for TCOs. This Act applies to individuals or entities seeking to import goods that could benefit from tariff concessions. The geographical and jurisdictional scope of the Act is nationwide, as it pertains to Commonwealth regulations on customs duties. However, there are specific exclusions noted in section 269SJ, which lists goods that cannot be subject to a TCO. The application of the Act may be extended or restricted through subordinate instruments such as regulations, which provide further detail on the conditions and procedures for TCO applications and the administration of tariff concessions.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0510518, under the Customs Act 1901, pertain to the application and approval process for Tariff Concession Orders (TCOs). Section 269F allows for an application to the Chief Executive Officer of Customs (CEO) for a TCO regarding specified goods. If the CEO is satisfied that the application does not pertain to goods excluded under section 269SJ, they must then evaluate whether the application meets the core criteria (section 269C). If the CEO determines that no substitutable goods are produced in Australia on the date the application was lodged, they are required to issue a written order (section 269P(3)). This instrument was applied for by Primary Metals and Alloys Pty Ltd concerning certain copper bars and/or rods and/or profiles and was granted on 4 November 2005, as declared in TCO No. 0510518, which specifies that these goods are subject to a free duty rate as per item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Customs Act 1901 imposes several obligations on the parties involved in the TCO process. The CEO must ensure that any TCO application does not concern goods specified under section 269SJ. Upon accepting a valid application, the CEO must promptly publish a notice in the Gazette inviting submissions from any interested parties (subsection 269K(1)). The CEO must also assess whether the application meets the core criteria, specifically verifying that no substitutable goods were produced in Australia on the application date (section 269C). Should the CEO be satisfied that these conditions are met, they must issue a written TCO.
The Act outlines potential consequences for non-compliance with its provisions. Although the specific offences and penalties are not detailed in the Explanatory Statement, it is known that breaches of the Customs Act 1901 can result in significant penalties. For instance, offences under the Act can lead to criminal charges, with penalties including fines and imprisonment, depending on the severity and nature of the offence. Civil consequences may also include financial penalties and legal actions to recover duties owed. It is important for parties to adhere strictly to the requirements of the Act to avoid these consequences.