EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0605626
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 non orientated electrical steel on 23 March 2006.
Instrument
TCO No 0605626 was made on 16 June 2006. It declares that those certain non orientated electrical steel 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. 0605626 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 Tariff Concession Instrument No. 0605626 was enacted under the Customs Act 1901, which governs the importation and exportation of goods in Australia. This particular instrument was introduced to address the issue of providing tariff concessions for specific goods that are not produced domestically, thereby preventing the imposition of customs duty on these goods. The instrument was made by the Chief Executive Officer of Customs (CEO) in response to an application by Atco Controls Pty Ltd for a Tariff Concession Order (TCO) in respect of certain non-orientated electrical steel. The CEO determined that no substitutable goods were produced in Australia, thus meeting the core criteria set out in the Act, and subsequently issued the TCO on 16 June 2006. The policy objective behind this measure is to ensure that Australian consumers and businesses have access to competitively priced goods, thereby promoting economic efficiency and consumer welfare.
Scope and Application
The Customs Act 1901, specifically under Part XVA, authorises the Chief Executive Officer (CEO) of Customs to issue Tariff Concession Orders (TCOs) which provide for a lower rate of customs duty on certain goods. This legislation applies to any person or entity wishing to import goods that meet the criteria for a TCO, with the primary condition being that no substitutable goods are produced in Australia. The Act's jurisdictional reach extends nationally as it is a Commonwealth Act. The process of applying for a TCO involves meeting core criteria specified under sections 269C and 269F of the Act, which include ensuring that the goods in question do not fall under the restricted list in section 269SJ. The CEO is mandated to publish a notice in the Gazette inviting submissions if there are reasons why the TCO should not proceed, although in this case, no submissions were received. Once the CEO is satisfied that the application meets the necessary criteria, a TCO is issued, and the concessional duty rate becomes effective from the date the application was lodged. Notably, this legislation does not impose any liabilities on any person and does not adversely affect the rights of any person other than the Commonwealth.
Key Provisions
The key operative sections of the Customs Act 1901, as applied by Tariff Concession Instrument No. 0605626, involve the process by which Tariff Concession Orders (TCOs) can be made and enforced. Section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of certain goods. Section 269C sets out the core criteria that must be met for a TCO application to be considered, primarily focusing on whether substitutable goods are produced in Australia. If the CEO is satisfied that the application meets these criteria, they are required under section 269P(3) to make a written order, or TCO, specifying the goods and the applicable rate of duty.
The obligations and requirements imposed by the Act on the parties involved are clearly defined. The CEO must ensure that any application for a TCO is not in respect of goods specified in section 269SJ of the Act, which lists goods ineligible for tariff concessions. The CEO is also required to publish a notice in the Gazette, inviting any interested parties to submit objections to the TCO if they believe it should not be made, as stipulated in section 269K(1). Additionally, the CEO must verify that no substitutable goods were produced in Australia on the day the application was lodged, in accordance with section 269C. If these conditions are met, the CEO must issue a TCO.
Breaching the requirements of the Act or failing to comply with the obligations outlined can lead to civil and criminal consequences. While specific offences and penalties are not detailed in the explanatory statement, general provisions of the Customs Act 1901 suggest that non-compliance could result in fines and potential imprisonment, depending on the severity of the breach. The Act also provides for the recovery of any overpaid duties or benefits improperly claimed. The precise penalties would be determined by the courts based on the nature and extent of the violation.