EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0605629
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 0605629 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. 0605629 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 Commonwealth Parliament, provides a framework for the administration of customs and excise duties in Australia. This Act includes provisions for Tariff Concession Orders (TCOs), which allow for reduced customs duties on certain imported goods under specific conditions. The policy objective of the Customs Act, as evidenced in its provisions for TCOs, is to support Australian industry and competitiveness by ensuring that imported goods do not compete unfairly with locally produced alternatives. This is achieved by ensuring that TCOs are only granted when no substitutable goods are produced in Australia. The Act ensures that the application process for TCOs is transparent, with provisions for public consultation and the publication of notices in the Gazette. Instrument No. 0605629, enacted under this scheme, provides tariff concessions for certain steel sheets and strips, reflecting the Act’s objective to support industry by reducing import duties where appropriate.
Scope and Application
The Customs Act 1901, through its Tariff Concession Instrument No. 0605629, applies to individuals and entities seeking tariff concessions on specific goods imported into Australia. This instrument pertains particularly to those applying for Tariff Concession Orders (TCOs) concerning goods such as steel sheets and/or strips. The application process is governed by section 269F, which allows applicants to apply for TCOs provided the goods are not those specified in section 269SJ. The core criteria for approving a TCO are outlined in sections 269C, 269B, and 269D of the Act, ensuring that the goods in question are not substitutable by domestically produced items. Once the Chief Executive Officer of Customs is satisfied that these criteria are met, a TCO can be issued, as per section 269P(3). The TCO, effective from the date of application, alters the customs duty rate from the general rate to a reduced or zero rate, thereby benefiting importers who can apply for duty refunds for goods imported post the effective date. The instrument does not extend to imposing liabilities on individuals or entities other than the Commonwealth.
Key Provisions
The Tariff Concession Instrument No. 0605629 made under the Customs Act 1901 sets forth a reduction in customs duty for specific steel sheets and/or strips. This is detailed in section 269P(3) which mandates that if the Chief Executive Officer of Customs (CEO) determines that a Tariff Concession Order (TCO) application meets the core criteria, they must issue a written order. In this case, the CEO was satisfied that the application for these steel sheets and/or strips met the criteria, as no substitutable goods were produced in Australia on the day the application was lodged, as stipulated in section 269C. Consequently, the CEO issued TCO No. 0605629, which declares that these specific steel sheets and/or strips are subject to a 0% duty rate instead of the general 5% duty rate, as outlined in Schedule 4 of the Customs Tariff Act 1995.
Entities and individuals governed by the Act must adhere to several obligations and requirements. For instance, as per section 269K(1), the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties who may have reasons to oppose the making of a TCO. This ensures transparency and allows for public scrutiny of the decision-making process. Furthermore, any person who wishes to apply for a TCO must ensure that their application meets the core criteria, which includes demonstrating that no substitutable goods were produced in Australia on the day the application was lodged, as defined in section 269C.
There are potential legal consequences for non-compliance with the provisions of the Customs Act 1901 and the associated TCOs. While the explanatory statement does not explicitly mention specific offences, breaches of customs regulations generally can lead to civil and criminal penalties. Under the Customs Act, penalties for breaches can include fines, imprisonment, or both, depending on the severity and intent of the violation. The maximum penalties for serious breaches can be substantial, reflecting the seriousness of evading customs duties or misapplying tariff concessions. It is essential for all parties to comply with the Act to avoid these potential repercussions.