EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0512617
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.
OneSteel NSW Pty Ltd applied for a TCO in respect of certain Electric Arc Furnace Parts on 21 September 2005.
Instrument
TCO No 0512617 was made on 16 December 2005. It declares that those certain Electric Arc Furnace Parts 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. 0512617 is taken to have come into force on 21 September 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, enacted by the Australian Parliament, established a framework for the application of customs duties on imported goods. It introduced the concept of Tariff Concession Orders (TCOs) to provide relief from customs duty on specific goods under certain conditions. The Act sought to address the problem of imposing undue financial burdens on industries that could not compete with locally produced goods by allowing for reduced customs duties on imported goods when no suitable domestic alternatives exist. The policy objective is to foster fair competition and support industries that rely on imported goods for their operations. Tariff Concession Instrument No. 0512617, made under the Customs Act, exemplifies this by providing a zero per cent duty rate on certain Electric Arc Furnace Parts, effective from the date the application was lodged, 21 September 2005.
Scope and Application
The Tariff Concession Instrument No. 0512617, made under the Customs Act 1901, applies specifically to certain Electric Arc Furnace Parts that are subject to a Tariff Concession Order (TCO). This legislation pertains to entities and individuals engaged in the importation of these specific parts, granting them a concession by reducing the customs duty from the general rate of 5% to 0%. The application of this Act is primarily focused on the industry involved in the importation and production of these parts, ensuring that they benefit from the tariff reduction when certain conditions are met. Geographically, the Act operates under the Commonwealth jurisdiction, extending its application across Australia. However, it does not apply to goods specified in section 269SJ of the Customs Act 1901, which excludes certain goods from being subject to a TCO. Additionally, the Act may be further elaborated through subordinate instruments, allowing for more detailed regulations and specific provisions that extend or restrict its application.
Key Provisions
The Tariff Concession Instrument No. 0512617, which operates under the Customs Act 1901, provides for a lower rate of customs duty on specific goods. Section 269F of the Act allows individuals or entities to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) on goods that meet certain criteria. Specifically, under section 269C, the CEO must determine if the application meets the core criteria, which requires that no substitutable goods were produced in Australia on the day the application was lodged. Section 269B and 269D of the Act define what is considered to be 'goods produced in Australia' and 'ordinary course of business', while section 269E further clarifies these terms. Once the CEO is satisfied that the application meets these criteria, section 269P(3) mandates the CEO to make a TCO, which declares that the goods are subject to a specified rate of duty under Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties involved, particularly the CEO, are significant. The CEO must assess each application to ensure it meets the core criteria and decide whether to issue a TCO. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as per subsection 269K(1). If no submissions are received, the CEO must proceed to make the TCO. The Act further mandates that the TCO is deemed to have come into force on the date the application was lodged, as stated in subsection 269S(1). This means that the concessions apply retroactively from the date the application was made, but without affecting any existing rights or imposing new liabilities prior to the registration of the TCO.
Breaching the conditions set out by the Act or failing to comply with the obligations can lead to various consequences. Although the explanatory statement does not specify the exact penalties, it is implied that non-compliance with the statutory requirements could result in legal repercussions. For instance, if the CEO does not follow the prescribed process for evaluating an application or fails to publish the required notice, this could be considered a breach of the statutory duty. Penalties for such breaches could include fines or other sanctions, although the specific penalties are not detailed in the explanatory statement. The statement does, however, clarify that the TCO does not impose any liabilities on any person, including importers who will be able to apply for a refund of duty on goods imported since the TCO came into force.