EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606863
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 ore concentrate pellet mixers on 11 April 2006.
Instrument
TCO No 0606863 was made on 7 July 2006. It declares that those certain ore concentrate pellet mixers 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. 0606863 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 Customs Act 1901, through the Tariff Concession Instrument No. 0606863, was enacted to provide a mechanism by which the Chief Executive Officer of Customs can grant tariff concessions on certain imported goods. This legislation addresses the problem of ensuring that Australian industries can compete effectively by providing tariff relief for specific goods that do not have Australian-made alternatives, thereby encouraging efficiency and economic growth without imposing undue burdens on the Commonwealth or other stakeholders. The Tariff Concession Instrument, made under the authority of the Customs Act, was introduced by the Parliament of Australia with the policy objective of facilitating trade by reducing customs duties on specified goods, thus supporting the economic viability of certain industries.
The process involves an application to the CEO for a Tariff Concession Order (TCO) for goods that meet specific criteria, such as the absence of substitutable Australian-made goods. Upon meeting these criteria, the CEO is mandated to make a TCO, which is effective from the date the application was lodged. This particular Instrument No. 0606863 was made in response to an application by Onesteel Manufacturing Pty Ltd for certain ore concentrate pellet mixers, resulting in a concession that reduced the customs duty from 5% to 0%. The instrument ensures that the rights of importers are protected and can seek duty refunds for imports made since the effective date of the TCO.
Scope and Application
The Customs Act 1901, specifically Part XVA, provides the framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These TCOs apply a lower rate of customs duty to goods specified in the order. Any person may apply to the CEO for a TCO for certain goods, provided that the goods are not those listed in section 269SJ of the Act which are ineligible for tariff concessions. The CEO must then determine whether the application meets the core criteria, which include that no substitutable goods were produced in Australia at the time the application was lodged. The CEO has the authority to make a written order in the form of a TCO if these criteria are satisfied. This process was applied in the case of Onesteel Manufacturing Pty Ltd, which successfully obtained a TCO for certain ore concentrate pellet mixers, resulting in a reduction of duty from the general rate of 5% to 0%. This legislation applies nationally across Australia, affecting entities involved in the importation of goods that are subject to a TCO. The scope of the Act extends to all industries where such goods are imported, and it impacts the conduct and transactions associated with the importation of these specified goods. The Act does not specify any exclusions, exemptions, or thresholds beyond those mentioned in section 269SJ, which lists ineligible goods. Subordinate instruments may further define terms or processes, but the primary application and criteria remain as outlined in the Customs Act 1901.
Key Provisions
The main operative sections of this legislation involve the application process for Tariff Concession Orders (TCOs) and the conditions under which they can be granted. Specifically, section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of certain goods. If the CEO is satisfied that the application meets the core criteria, they are required to make a written order, as per section 269P(3). The core criteria are defined in sections 269C, 269B, 269D, and 269E, which specify that no substitutable goods must be produced in Australia in the ordinary course of business on the day the application was lodged.
The Act imposes obligations on both the applicant and the CEO. The applicant must submit an application that meets the core criteria as specified in section 269F. The CEO, on receiving a valid application, must assess whether it meets the core criteria and subsequently make a written TCO if the criteria are satisfied, as per section 269P(3). Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as outlined in subsection 269K(1).
Any breach of the requirements set out in the Act can lead to civil and criminal consequences. For instance, if a person knowingly or negligently submits an application that does not meet the core criteria, they could be subject to penalties under relevant laws. The specific penalties are not detailed in the provided text but could include fines or other civil remedies. It is also worth noting that the Act specifies that a TCO does not affect the rights of any person as at the date of registration and does not impose liabilities on any person, as per the provided text. This means that any adverse consequences of a TCO would likely be limited to those who do not comply with the statutory requirements.