EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0605449
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.
Visy Steel Products Pty Ltd applied for a TCO in respect of certain cold rolled steel sheets on 17 March 2006.
Instrument
TCO No 0605449 was made on 2 June 2006. It declares that those certain cold rolled steel sheets 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. 0605449 is taken to have come into force on 17 March 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 Commonwealth Parliament, establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO) to provide relief from customs duties on certain imported goods. The Act addresses the problem of ensuring that Australian industries remain competitive by potentially reducing the cost of imported goods that have no local substitutes. Specifically, this legislation allows for the application of lower customs duties on goods for which no substitutable products are produced in Australia, thereby facilitating the import of such goods. This approach aims to support Australian businesses and consumers by making imported goods more affordable and accessible. The Tariff Concession Instrument No. 0605449, introduced in 2006, exemplifies this by granting a tariff concession on specific cold rolled steel sheets, reducing their duty from 5% to 0%. The policy objective of this legislative instrument is to provide tariff relief on goods that are not produced domestically, thereby encouraging competition and lowering costs without imposing new liabilities on individuals or entities.
Scope and Application
The Tariff Concession Instrument No. 0605449 under the Customs Act 1901 applies to individuals or entities seeking tariff concessions for specific goods, particularly those seeking a reduction in the rate of customs duty. The Act allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that lower the duty on goods specified in the application, provided that the goods are not prohibited under section 269SJ and that there are no substitutable goods produced in Australia. This concession is applicable nationwide and is governed by Commonwealth law, meaning it has a national jurisdictional reach. Any exclusions or restrictions are clearly defined within the Act, particularly under sections 269SJ and 269C, which outline the types of goods that cannot be subject to a TCO and the conditions that must be met for an application to be considered. The commencement date of the TCO is the date the application is lodged, as stipulated in subsection 269S(1), and it does not affect any pre-existing rights or impose new liabilities on individuals or entities. This legislative instrument effectively extends the application of tariff concessions through subordinate instruments, ensuring that the concessions are administered in accordance with the specified criteria and conditions.
Key Provisions
The Customs Act 1901 provides for the creation of Tariff Concession Orders (TCOs) through Part XVA, which can reduce the customs duty on certain goods. Section 269F of the Act allows individuals or entities to apply to the Chief Executive Officer (CEO) of Customs for a TCO for specific goods. The CEO must assess whether the application meets the core criteria, which are outlined in section 269C of the Act. According to this section, the application can only proceed if no substitutable goods, as defined in section 269D, were produced in Australia in the ordinary course of business on the day the application was lodged. Once these criteria are satisfied, the CEO is required to issue a written order, known as a TCO, as stated in subsection 269P(3) of the Act.
The obligations imposed by the Act on the parties involved are primarily on the applicant and the CEO. The applicant must ensure that their application meets the criteria set out in section 269C of the Act, which involves demonstrating that no substitutable goods were produced in Australia at the time of application. The CEO, on the other hand, must review the application, publish a notice inviting submissions in the Gazette as per subsection 269K(1), and decide whether to issue a TCO based on the application's compliance with the core criteria. In the case of TCO No. 0605449, the CEO found that the application for certain cold rolled steel sheets met the criteria, and therefore, issued the order.
Failure to comply with the requirements set forth by the Customs Act 1901 can lead to various consequences. While the Act does not explicitly outline specific offences or penalties, breaches of customs laws can result in both civil and criminal penalties. Civil penalties may include financial penalties, seizure of goods, and forfeiture, as outlined in other sections of the Customs Act and associated regulations. Criminal penalties can include fines and imprisonment, particularly if the breach is deemed to be wilful or involves significant financial gain. The exact penalties depend on the nature and severity of the breach, as well as the provisions of other relevant legislation.