EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0605853
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.
Onesteel Manufacturing Pty Ltd applied for a TCO in respect of certain cable reels on 28 March 2006.
Instrument
TCO No 0605853 was made on 23 June 2006. It declares that those certain cable reels 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. 0605853 is taken to have come into force on 28 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 framework for the regulation of customs and excise in Australia. One of the mechanisms within the Act is the Tariff Concession Order (TCO) scheme, introduced to address the need for tariff reductions on specific goods to promote economic efficiency and competitiveness. The Explanatory Statement for Tariff Concession Instrument No. 0605853, issued under this scheme, highlights the process by which the Chief Executive Officer of Customs assesses applications for TCOs and the subsequent benefits to importers. This particular instrument, made on 23 June 2006, concerns an application by Onesteel Manufacturing Pty Ltd for a TCO on certain cable reels, resulting in a reduced duty rate from 5% to 0%. The policy objective is to ensure that the importation of these goods is facilitated by lower tariff rates, provided no substitutable goods are produced in Australia, thereby encouraging import activity and supporting economic interests.
Scope and Application
The Tariff Concession Instrument No. 0605853 under the Customs Act 1901 applies specifically to the concession of customs duties for certain cable reels, as requested by Onesteel Manufacturing Pty Ltd. This concession is granted under the authority of the Chief Executive Officer of Customs (CEO) when it is determined that no substitutable goods are produced in Australia in the ordinary course of business, as stipulated in section 269C of the Act. The application of this Instrument is limited to the goods explicitly mentioned in the Instrument and does not extend to other goods not specified therein. The Instrument was made on 23 June 2006, effective from 28 March 2006, the date the application was lodged. It reduces the duty rate from the general rate of 5% to 0% for the specified cable reels, provided by item 50 of Schedule 4 to the Customs Tariff Act 1995. The Instrument does not affect any pre-existing rights or impose liabilities on any person other than the Commonwealth, and it does not disadvantage anyone who had rights as at the date of registration. The CEO must publish a notice in the Gazette inviting any interested party to lodge a submission if they believe the TCO should not be made; however, in this case, no submissions were received.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0605853 are section 269F, which allows for the application for a Tariff Concession Order (TCO), and section 269P, which outlines the process for the Chief Executive Officer of Customs (CEO) to consider and make a TCO. Section 269C details the core criteria that the CEO must be satisfied with before making a TCO, specifically that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. Once the CEO determines that the application meets these criteria, section 269P(3) requires the CEO to issue a written TCO.
Under the Customs Act 1901, the CEO has several obligations when considering a TCO application. The CEO must ensure that the application is not for goods specified in section 269SJ, which lists goods that cannot be subject to a TCO. Once an application is accepted as valid, the CEO must publish a notice in the Gazette inviting any person who believes the TCO should not be made to lodge a submission. The CEO must then consider these submissions before making a decision. If no submissions are received, as was the case with TCO No. 0605853, the CEO can proceed to make the TCO. The CEO must also ensure that the TCO does not adversely affect the rights of persons other than the Commonwealth or impose liabilities on them in respect of actions taken before the TCO's effective date.
The Customs Act 1901 also includes provisions for penalties and consequences for non-compliance with the requirements of a TCO. Although the explanatory statement does not explicitly detail these penalties, the Act generally provides for both civil and criminal penalties for breaches. Civil penalties may include fines and compensation for any financial loss caused by the breach. Criminal penalties may include imprisonment, particularly if the breach is deemed to be wilful or involves significant financial loss to the Commonwealth. The maximum penalties can vary widely depending on the specific nature and severity of the breach, but they are intended to ensure compliance with the provisions of the Act and the terms of any TCO.