EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0603727
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 2024 rod on 13 February 2006.
Instrument
TCO No 0603727 was made on 19 May 2006. It declares that those certain extruded aluminium 2024 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. 0603727 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 Tariff Concession Instrument No. 0603727 was enacted in 2006 under the Customs Act 1901 to address the specific needs of Australian importers by providing a concession on customs duty for certain extruded aluminium 2024 rod. This instrument was introduced to facilitate trade and reduce the financial burden on importers by allowing them to benefit from a lower rate of customs duty on these goods. The Customs Act 1901, enacted by the Australian Parliament, establishes a framework for tariff concessions, enabling the Chief Executive Officer of Customs to make Tariff Concession Orders. The policy objective behind this legislation is to support the economic efficiency of importing by ensuring that imported goods are competitively priced relative to locally produced alternatives, thereby promoting fair trade practices and benefiting the importing community.
Scope and Application
The Tariff Concession Instrument No. 0603727, established under the Customs Act 1901, applies to the specific entity that applied for the concession, in this instance Omega Steel and Alloy Pty Ltd, and to the goods specified within the instrument, namely certain extruded aluminium 2024 rod. The instrument is enacted by the Chief Executive Officer of Customs, who is authorised to make such orders under the Act, and it pertains to the customs duty applicable to these particular goods. The geographic reach of this instrument is effectively national, as it relates to the importation of goods into Australia and the customs duties levied by the Commonwealth. The Act applies to any person or entity seeking tariff concessions for goods entering Australia, and it extends its influence across all states and territories by virtue of its Commonwealth enactment. The application of the TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on entities other than the Commonwealth for actions taken prior to the instrument's registration. Additionally, the instrument does not operate retrospectively, ensuring that it does not affect rights or impose liabilities for events occurring before its effective date.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0603727, under the Customs Act 1901, declare certain extruded aluminium 2024 rod to be subject to a tariff concession order (TCO). This instrument specifies that these goods are to be treated under item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty-free rate for these goods (s. 269P(3)). The instrument was made on 19 May 2006, following an application by Omega Steel and Alloy Pty Ltd on 13 February 2006. The instrument came into force on the date the application was lodged, as per subsection 269S(1) of the Act.
The Act imposes several obligations and requirements on the parties involved. The Chief Executive Officer of Customs (CEO) must determine whether an application for a TCO meets the core criteria, as set out in section 269C of the Act. If the CEO is satisfied that the application meets these criteria, they must make a written order declaring that the goods in question are subject to a TCO (s. 269P(3)). Additionally, the CEO is required to publish a notice in the Gazette, inviting submissions from any person who believes there are reasons why the TCO should not be made (s. 269K(1)). In this case, no submissions were received.
Under the Act, there are potential civil and criminal consequences for breaches of its provisions. While the specific penalties for breaches are not detailed in the Explanatory Statement, it is known that breaches of the Customs Act 1901 can result in significant penalties. For instance, knowingly making a false statement in an application for a TCO could lead to civil penalties, including fines, and criminal penalties, such as imprisonment. The exact penalties depend on the nature and severity of the breach, but they can be substantial, reflecting the seriousness of circumventing the tariff concession scheme.
The Tariff Concession Instrument No. 0603727 does not affect the rights of any person other than the Commonwealth as at the date of registration, and it does not impose any new liabilities on any person (s. 269S(1)). Importers of the specified goods will benefit from the TCO by being able to apply for a refund of duty on goods imported since the date the TCO is taken to have come into force (Reg. 126(1)(r)). This ensures that the rights of importers are protected and that they are not disadvantaged by the introduction of the TCO.