EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0513491
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.
Tomen Australia Ltd applied for a TCO in respect of certain I Beams on 4 October 2005.
Instrument
TCO No 0513491 was made on 3 January 2006. It declares that those certain I Beams 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. 0513491 is taken to have come into force on 4 October 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 manage the regulation of goods entering and leaving Australia, ensuring that the country's trade policies are upheld. One particular gap it addresses is the need for tariff concessions that can stimulate trade by reducing the customs duty on specific goods. This is facilitated through the creation of Tariff Concession Orders (TCOs), which can be applied for by interested parties and granted by the Chief Executive Officer of Customs if certain criteria are met. The 2006 Explanatory Statement for Tariff Concession Instrument No. 0513491 details the process by which such concessions are applied for and granted, highlighting the importance of ensuring that no substitutable goods are produced in Australia at the time of application.
This legislative instrument was introduced by the Parliament of Australia to provide clarity and a formalised procedure for the granting of tariff concessions under the Customs Act 1901. The policy objective behind these concessions is to encourage trade by making imported goods more affordable, thereby supporting economic growth and consumer access to a broader range of products. The process outlined ensures that applications are considered fairly and transparently, with an opportunity for public consultation before any orders are made.
Scope and Application
The Tariff Concession Instrument No. 0513491 applies to the concessions on customs duty for specific goods as outlined in the Customs Act 1901. This legislation primarily concerns entities or individuals involved in the importation of the specified goods, which, in this case, are certain I Beams. The geographic scope of this Act is national, as it falls under the Commonwealth's authority to regulate and collect customs duties. The Act provides for the application of a lower rate of customs duty on goods that are the subject of a Tariff Concession Order (TCO), provided the goods are not specified as ineligible under section 269SJ. The application process involves an assessment by the Chief Executive Officer of Customs to determine if the goods in question are substitutable by products manufactured in Australia. If no such domestic production exists, the application can proceed, leading to the issuance of a TCO. The application of this Act can be further detailed through subordinate instruments, which may provide additional criteria or conditions for the concession.
Key Provisions
The key operative sections of the Customs Act 1901, as evidenced by Tariff Concession Instrument No. 0513491, involve the application and granting of Tariff Concession Orders (TCOs) (sections 269C, 269F, 269P(3)). Section 269F allows an individual or entity to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of specific goods. If the application meets the core criteria outlined in section 269C, the CEO must issue a written order, a TCO, that specifies the goods and the lower rate of customs duty applicable to them (section 269P(3)). The CEO determines that the application meets these criteria if, on the day of application, no substitutable goods were produced in Australia in the ordinary course of business (section 269C).
The obligations imposed by the Act on the parties include ensuring that any TCO application is made in accordance with the statutory provisions, and particularly, that the application is not in respect of goods specified in section 269SJ of the Act. The CEO is obligated to assess the validity of the application against the core criteria and to publish a notice in the Gazette inviting submissions from any interested parties (subsection 269K(1)). If no submissions are received, the CEO proceeds to make the TCO. Importers must also comply with the new tariff rates and may apply for a refund of duty on goods imported since the effective date of the TCO (paragraph 126(1)(r) of the Regulations).
In terms of consequences for breach, the Act does not explicitly outline criminal or civil penalties for failing to comply with the requirements for a TCO. However, non-compliance with customs regulations generally may lead to penalties including fines and imprisonment under the Customs Act and related legislation. For example, knowingly making a false statement in an application for a TCO could lead to penalties under section 252 of the Customs Act, which includes a maximum penalty of 2,000 penalty units or imprisonment for five years, or both. Additionally, failing to pay the correct duty could result in penalties under section 170 of the Act, including fines and imprisonment.