EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0605624
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.
Atco Controls Pty Ltd applied for a TCO in respect of certain steel sheets and/or strips on 23 March 2006.
Instrument
TCO No 0605624 was made on 16 June 2006. It declares that those certain steel sheets and/or strips 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. 0605624 is taken to have come into force on 23 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 Australian Parliament, provides a legislative framework for the imposition of customs duties on imported goods. The Act was amended to include the provision for Tariff Concession Orders (TCOs) to address specific economic and trade policy objectives, particularly to promote the efficient use of resources by reducing duties on goods that are not produced in Australia. The Tariff Concession Instrument No. 0605624, made under the authority of the Customs Act, grants a tariff concession for certain steel sheets and/or strips, reducing the duty rate from 5% to 0% upon the application by Atco Controls Pty Ltd, subject to the CEO's satisfaction that no substitutable goods are produced in Australia. This legislative instrument aims to benefit importers by potentially allowing them to claim refunds for duties paid on imports before the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0605624 under the Customs Act 1901 applies to the specific category of steel sheets and/or strips for which Atco Controls Pty Ltd applied, and it is applicable to any entity seeking to import these goods into Australia. The instrument establishes a zero percent duty rate on these goods, a concession from the general 5 percent duty rate, provided that the CEO of Customs is satisfied that no substitutable goods are produced in Australia in the ordinary course of business. The TCO is effective from the date of the application, 23 March 2006, and does not disadvantage any existing rights of persons other than the Commonwealth or impose liabilities on such persons for actions taken prior to the registration date. This instrument is part of a broader scheme within Part XVA of the Customs Act, which allows for the creation of TCOs by the CEO, subject to certain criteria and exclusions outlined in the Act. Any further extensions or specific applications of the TCO may be detailed in subordinate instruments.
Key Provisions
The primary operative sections of this legislation are section 269C, 269F, 269P, and 269S, which outline the process for applying for and making a Tariff Concession Order (TCO). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of certain goods. If the application meets the core criteria specified in section 269C, which includes the absence of substitutable goods produced in Australia, the CEO must make a written TCO order, as stated in section 269P. Section 269S details the commencement of the TCO from the date the application was lodged. In this case, TCO No. 0605624 applies to certain steel sheets and/or strips, reducing the duty rate from 5% to 0%.
The Act imposes certain obligations on both applicants and the CEO of Customs. Applicants, such as Atco Controls Pty Ltd, must ensure their applications for a TCO meet the core criteria and are supported by relevant evidence that no substitutable goods are produced in Australia. The CEO, on the other hand, has the duty to review the application and, if satisfied, to make a TCO. The CEO is also required to publish a notice in the Gazette, inviting submissions from any person who believes the TCO should not be made, as per subsection 269K(1). The CEO must consider any submissions received and make a decision accordingly. In this instance, no submissions were received in response to the notice.
Failure to comply with the requirements set out in the Customs Act 1901 may result in various consequences. Firstly, if an applicant submits an application that does not meet the core criteria, the CEO is not obligated to make a TCO. This could lead to continued higher duty rates on the goods in question. Secondly, if the CEO fails to adequately review an application or improperly makes a TCO when the criteria are not met, they may face legal scrutiny or administrative action. The Act does not explicitly outline penalties for breaches by applicants or the CEO; however, non-compliance with the Act could potentially lead to legal disputes, fines, or other enforcement actions as deemed appropriate by the relevant authorities.