EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0605627
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 0605627 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. 0605627 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. 0605627, enacted under the Customs Act 1901, addresses the problem of providing tariff concessions on specific goods, in this case, certain non-orientated electrical steel, to encourage their importation and support certain industries. The instrument was introduced to facilitate lower customs duty rates for these goods, thereby making them more competitive and accessible. The Customs Act 1901 empowers the Chief Executive Officer of Customs to make such tariff concession orders if the application meets specified criteria, ensuring that the goods are not substitutable by products manufactured in Australia. This legislative measure aims to support industries by reducing the cost of essential imported goods, thereby promoting economic efficiency and competitiveness. The instrument was enacted by the relevant legislature to ensure that the tariff concessions are applied fairly and transparently, with due consideration given to industry needs and economic benefits.
Scope and Application
The Tariff Concession Instrument No. 0605627 under the Customs Act 1901 applies to goods specified in the instrument, namely certain non-orientated electrical steel, and is directed towards entities or individuals who are involved in the importation of these goods. The Act operates on a national level as it pertains to the Commonwealth’s customs regime. The instrument was made pursuant to section 269F of the Customs Act 1901, which allows for the application of tariff concessions by the Chief Executive Officer of Customs, provided certain criteria are met. Specifically, the instrument applies to the goods for which Atco Controls Pty Ltd applied, and the application was accepted on the basis that no substitutable goods were produced in Australia at the time of application. The instrument exempts these goods from the general rate of customs duty, which is 5%, and instead imposes a duty-free rate on them. The instrument’s application is not restricted by geographic or jurisdictional boundaries, as it pertains to the national customs legislation of Australia. The instrument does not impose any liabilities on persons other than the Commonwealth and ensures that the rights of importers are beneficially affected from the date the TCO is taken to have come into force, which is 23 March 2006. The instrument does not contain any exclusions or exemptions beyond those specified in the Customs Act 1901.
Key Provisions
The primary operative sections of the Customs Act 1901 that relate to Tariff Concession Orders (TCOs) are sections 269C, 269F, 269P, and 269S (subsections 269K(1) and 269S(1)). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the CEO is satisfied that the application meets the core criteria outlined in section 269C and that the goods are not specified in section 269SJ, a TCO must be made (section 269P(3)). The TCO is deemed to come into force on the date the application was lodged (subsection 269S(1)). Additionally, section 269K(1) mandates that the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made.
The Customs Act 1901 imposes several obligations on both the CEO and applicants for TCOs. The CEO must ensure that the application for a TCO meets the core criteria, specifically that no substitutable goods are being produced in Australia on the date the application was lodged (section 269C). The CEO is also required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting submissions from interested parties (subsection 269K(1)). If no submissions are received, the CEO must proceed to make the TCO (subsection 269S(1)). For applicants, the primary requirement is to ensure their application is made in accordance with the provisions of section 269F and that it pertains to goods not listed in section 269SJ.
There are no explicit offences, penalties, or civil/criminal consequences mentioned in the Act for breaches related to the TCO process itself. However, the Act does ensure that the rights of individuals are protected under paragraph 126(1)(r) of the Regulations, which allows importers to apply for a refund of duty on goods imported since the date the TCO is taken to have come into force. This provision ensures that no person, other than the Commonwealth, is disadvantaged or imposed with liabilities in respect of anything done or omitted before the date of registration of the TCO.