EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0603701
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.
Omega Steel and Alloy Pty Ltd applied for a TCO in respect of certain extruded aluminium 2011 rod on 13 February 2006.
Instrument
TCO No 0603701 was made on 19 May 2006. It declares that those certain extruded aluminium 2011 rod 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. 0603701 is taken to have come into force on 13 February 2006.
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 Parliament of Australia, establishes a framework within which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs. This Act was introduced to address the need for a mechanism by which the CEO could grant tariff concessions on specific goods, thereby facilitating trade by reducing customs duty rates for those goods. The policy objective, as outlined in the Act, is to provide tariff relief to importers of goods that are not produced domestically or are substitutable by imported goods, thus encouraging trade and economic growth. The Tariff Concession Instrument No. 0603701, made on 19 May 2006, is an example of this mechanism in action, providing a tariff concession for certain extruded aluminium 2011 rod, where no substitutable goods were produced in Australia. This concession aims to benefit importers by potentially reducing their duty liabilities and does not impose any new liabilities on any person.
Scope and Application
The Tariff Concession Instrument No. 0603701, made under the Customs Act 1901, applies to the specific goods of certain extruded aluminium 2011 rod, as submitted by Omega Steel and Alloy Pty Ltd. The instrument is applicable to the import of these goods, granting them tariff concessions that were sought and approved by the Chief Executive Officer of Customs. The Act applies nationally, with the CEO having the authority to make the Tariff Concession Order (TCO) on behalf of the Commonwealth. Section 269SJ of the Act sets out the exclusions, specifying that certain goods cannot be subject to a TCO. The CEO must ensure that the application does not involve these excluded goods and that no substitutable goods are produced in Australia in the ordinary course of business. Once the core criteria are met, a TCO is issued, which provides for a lower or free rate of customs duty for the specified goods. The geographic reach of this legislation is the entire Commonwealth of Australia, and its application is not restricted by state or territory boundaries. Any exclusions or exemptions are strictly defined within the Act itself, and no additional exclusions or thresholds are imposed by subordinate instruments.
Key Provisions
Section 269F of the Customs Act 1901 (the Act) outlines the process by which an individual or entity may apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO). The Act stipulates that if the CEO determines that the application pertains to goods that are not listed in section 269SJ, which details goods that cannot be subject to a TCO, the CEO must assess whether the application meets the core criteria as defined in section 269C. This core criteria require that, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business, with specific definitions provided in sections 269D, 269E, and 269F. If the CEO is satisfied that the application meets these criteria, they must issue a written order, a TCO, specifying that the goods in question are subject to a prescribed rate of duty as detailed in Schedule 4 of the Customs Tariff Act 1995.
Under this legislation, the CEO has a clear set of obligations. Upon receiving a TCO application, the CEO must first verify that the application pertains to goods not listed in section 269SJ. If the CEO determines that the application is valid, they must then ensure that the core criteria, as defined in section 269C, are met. This involves confirming that no substitutable goods were produced in Australia in the ordinary course of business on the date of application. If these criteria are satisfied, the CEO must proceed to issue a TCO, specifying the applicable rate of duty for the goods in question. Additionally, as per subsection 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe there are reasons why the TCO should not be made.
Failure to comply with the requirements set out in the Customs Act 1901 can lead to significant consequences. While the explanatory statement does not detail specific offences or penalties, breaches of the Act can generally result in both civil and criminal penalties, depending on the severity and intent of the breach. For example, providing false information in an application for a TCO could be considered an offence under the Act, potentially leading to fines or other legal consequences. Furthermore, any person found to be in violation of the Act's provisions may face legal action, including potential prosecution by the Commonwealth Director of Public Prosecutions.
The explanatory statement notes that the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration. This ensures that the rights of importers will be beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO is taken to have come into force, as per paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any liabilities on any person, further safeguarding the interests of those affected by the concession. The commencement date of the TCO is the same as the date on which the application was lodged, ensuring a seamless transition for all parties involved.