EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606954
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 grinding mills on 11 April 2006.
Instrument
TCO No 0606954 was made on 7 July 2006. It declares that those certain grinding mills 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. 0606954 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, enacted by the Australian Parliament, established a framework within which Tariff Concession Orders (TCOs) could be issued by the Chief Executive Officer of Customs (CEO). The Tariff Concession Instrument No. 0606954, introduced to address specific economic and trade policy needs, was enacted to provide tariff concessions for certain grinding mills, reducing the customs duty from the general rate of 5% to 0%. The policy objective was to facilitate the import of these goods by Onesteel Manufacturing Pty Ltd, ensuring that no substitutable goods were produced in Australia at the time of application, thereby promoting fair trade and economic efficiency. This instrument was made under the authority granted by section 269F of the Customs Act 1901, which allows for applications for tariff concessions, subject to the CEO’s satisfaction of the core criteria outlined in sections 269C and 269P of the Act.
Scope and Application
The Customs Act 1901, as augmented by the Tariff Concession Instrument No. 0606954, pertains to the application process and conditions under which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs. This Act applies to any person or entity that seeks to import goods and benefits from a lower rate of customs duty as specified in a TCO. The scope of the Act is national, impacting all entities within the Commonwealth of Australia. The Act’s application is restricted by section 269SJ, which outlines goods that cannot be the subject of a TCO, such as those that could undermine national security or public policy. The Act’s application is further delineated through the use of subordinate instruments, which can extend or restrict its application in specific contexts. The commencement of a TCO is effective from the date an application is lodged, as per subsection 269S(1), and no retroactive liabilities or disadvantages are imposed on any person other than the Commonwealth.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0606954 under the Customs Act 1901 (sections 269C, 269F, 269K, and 269S) provide the framework for the application and assessment of Tariff Concession Orders (TCOs). Section 269F allows an application to be made by a person for a TCO in relation to certain goods. If the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria, as outlined in section 269C, and the goods are not excluded under section 269SJ, the CEO must make a written order (section 269P). This written order, known as a TCO, then applies a prescribed lower rate of customs duty to the specified goods.
The obligations imposed on the parties under this legislation are multifaceted. The CEO of Customs has the responsibility to assess the validity of TCO applications based on the criteria set out in the Act, including ensuring that no substitutable goods are produced in Australia. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes the TCO should not proceed (section 269K). Once a TCO is made, it comes into effect on the date the application was lodged, as stipulated in section 269S. Additionally, the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration, ensuring no one is disadvantaged or imposed upon by the concession.
In terms of consequences for breaches, the Act does not explicitly detail offences, penalties, or consequences for non-compliance with the TCO provisions. However, general provisions within the Customs Act 1901 and associated regulations might apply to ensure compliance and address any breaches. These could include administrative penalties, fines, or legal action for violations related to customs duties and the misapplication of tariff concessions. The specific penalties would depend on the nature and severity of the breach, but they are typically outlined in the broader customs legislation and regulatory framework.