EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606837
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 slurry tank agitators on 11 April 2006.
Instrument
TCO No 0606837 was made on 7 July 2006. It declares that those certain slurry tank agitators 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. 0606837 is taken to have come into force on 11 April 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. 0606837 was introduced to address the issue of tariff concessions for specific goods as outlined under the Customs Act 1901. Enacted by the Chief Executive Officer of Customs, this instrument aims to provide a lower rate of customs duty on certain slurry tank agitators, as requested by Onesteel Manufacturing Pty Ltd. The primary objective of this legislation, as stated in the explanatory statement, is to ensure that such tariff concessions are granted where applicable, provided that no substitutable goods are produced in Australia. This was achieved by ensuring that the core criteria were met, leading to the issuance of the tariff concession order on 7 July 2006, which reduced the duty rate from 5% to 0%. This Act ensures that the rights of importers are beneficially affected and no existing rights or liabilities are adversely impacted by the concession.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the framework for Tariff Concession Orders (TCOs), which the Chief Executive Officer of Customs (CEO) can issue to apply a lower rate of customs duty on certain goods. These orders are available for goods not specified in section 269SJ of the Act and meet the core criteria outlined in section 269C, which essentially requires that no substitutable goods are produced in Australia in the ordinary course of business at the time of the application. The Act applies to any person who applies for a TCO in respect of goods, subject to the conditions and exclusions outlined. The geographic reach of the Act is national, as it pertains to customs duties across Australia. The application process involves the CEO considering whether the goods specified in the application meet the criteria, and if so, issuing a written TCO. Notably, the rights of any person other than the Commonwealth are not adversely affected by the TCO as it relates to actions taken before the TCO’s effective date. Any importers of the affected goods can apply for a refund of duty from the date the TCO is considered effective, which is the date the application was lodged. Subordinate instruments may extend or restrict the application of this Act, but the primary legislation sets the foundational criteria and process for TCOs.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0606837 under the Customs Act 1901 (section 269F) allow for the application to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of goods, provided they do not fall under the categories specified in section 269SJ. For an application to be considered, it must meet the core criteria outlined in section 269C, which require that on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If these criteria are met, the CEO must then issue a TCO. This instrument (section 269P(3)) mandates that the CEO must make a written order declaring the goods subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, specifying the applicable reduced rate of duty. In this particular case, the TCO No. 0606837 declares that certain slurry tank agitators are subject to item 50 of Schedule 4, with a rate of duty reduced from 5% to 0%.
The Customs Act 1901 imposes specific obligations on the parties involved in the TCO process. The CEO of Customs is obligated to assess each application to ensure it meets the statutory criteria before issuing a TCO. The applicant, in this case Onesteel Manufacturing Pty Ltd, must provide all necessary information and evidence to support their claim that no substitutable goods were produced in Australia on the date the application was lodged. Additionally, upon accepting a TCO application as valid, the CEO is required under section 269K(1) to publish a notice in the Gazette inviting any interested parties to submit any objections or submissions within a specified timeframe. In the instance of TCO No. 0606837, no submissions were received, facilitating the CEO’s decision to issue the order.
The Customs Act 1901 also outlines specific offences, penalties, and consequences for breaches of the provisions under the Act. While the explanatory statement does not explicitly detail penalties for non-compliance with TCO regulations, it is understood that breaches of the Customs Act could lead to significant civil or criminal consequences. Civil penalties could include financial penalties, while criminal penalties might involve fines and imprisonment depending on the severity of the breach. The maximum penalties would be determined based on the specific breach and relevant sections of the Act, but the potential for such penalties underscores the importance of adherence to the statutory requirements.
Additionally, the Act ensures that the issuance of a TCO does not adversely affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person for actions taken prior to the TCO’s registration date. This protection extends to importers, who benefit from the reduced duty rates and may apply for refunds on duties paid since the effective date of the TCO, as stipulated under paragraph 126(1)(r) of the Regulations. This provision ensures that legitimate importers can reclaim any overpaid duties without incurring additional liabilities.