EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0513492
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 0513492 was made on 23 December 2005. 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 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.0513492 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 by the Parliament of Australia to regulate the import and export of goods, including the imposition and collection of customs duties. The Act includes provisions for the establishment of Tariff Concession Orders (TCOs) to provide relief from certain customs duties under specific conditions. The problem or gap addressed by this legislation is the potential disadvantage to Australian businesses that need to import certain goods that are not produced domestically, thereby giving them a competitive edge. The policy objective, as stated in the explanatory statement, is to allow the Chief Executive Officer of Customs to make orders that provide tariff concessions for goods that are not produced in Australia and for which no substitutable goods are produced domestically. This mechanism is designed to support industries by reducing the cost of imported goods, facilitating fair competition, and promoting economic efficiency.
Scope and Application
The Customs Act 1901, as amended by the Tariff Concession Instrument No. 0513492, provides for the application of tariff concession orders (TCOs) that grant concessions on customs duty for specific goods. The Act applies to any person or entity that imports goods subject to a TCO, thereby providing them with a lower rate of customs duty compared to the standard tariff. The Act applies across the Commonwealth of Australia and encompasses the entire customs duty framework as stipulated in the Customs Act 1901 and the Customs Tariff Act 1995. Notably, the Act excludes certain goods as specified in section 269SJ of the Customs Act 1901, which delineates goods ineligible for tariff concessions. The application of the Act can be extended or modified through subordinate instruments, allowing for the specification of additional criteria or exclusions beyond those explicitly stated in the primary legislation. This instrument was effective from the date the application was lodged, 4 October 2005, and does not disadvantage any person other than the Commonwealth by imposing liabilities for actions taken prior to its registration.
Key Provisions
The Customs Act 1901, under Part XVA, outlines a process for the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCOs) (s 269F). These orders apply a lower rate of customs duty to specified goods. An individual or entity can apply to the CEO for a TCO, and if the CEO is convinced that the application pertains to goods not listed in section 269SJ, they must then evaluate whether the application meets the core criteria. Specifically, a TCO application is deemed to meet the core criteria if, on the date of submission, no substitutable goods were produced in Australia in the ordinary course of business (s 269C).
The obligations imposed by the Act on applicants and the CEO are clearly defined. An applicant must submit a valid TCO application, ensuring that the goods in question are not listed in section 269SJ. The CEO, upon receiving a valid application, has a duty to assess whether the core criteria are met. This involves verifying that no substitutable goods were produced in Australia in the ordinary course of business on the date of the application. Once the CEO determines that the core criteria are satisfied, they are required to issue a written TCO (s 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 proceed (s 269K(1)).
There are potential consequences for breaches of the Act's provisions. Although the explanatory statement does not detail specific offences or penalties, it is implied that non-compliance with the Act could lead to legal ramifications. For instance, submitting a false application or providing misleading information could be considered fraudulent and might attract penalties under other sections of the Customs Act or related legislation. In such cases, penalties could include fines or imprisonment, depending on the severity of the breach.
For the particular TCO No. 0513492, once it came into effect on 4 October 2005, the rights of importers of the specified goods were beneficially affected. Importers could apply for a refund of duty on goods imported since the effective date of the TCO (Regulation 126(1)(r)). Importantly, the TCO did not impose any liabilities on any person, nor did it affect the rights of any person, other than the Commonwealth, in respect of anything done or omitted before the registration date. This ensures that no pre-existing rights or obligations are adversely impacted by the TCO.