EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0610733
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.
Contract Investments Pty Ltd applied for a TCO in respect of certain annealed stainless steel wire on 23 June 2006.
Instrument
TCO No 0610733 was made on 15 September 2006. It declares that those certain annealed stainless steel wire are goodsis a product 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 free.
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. 0610733 is taken to have come into force on 23 June 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, establishes a framework for the administration of customs duties and includes provisions for tariff concession orders (TCOs) to reduce customs duty on specific goods. The Tariff Concession Instrument No. 0610733, issued in 2006, applies this framework to certain annealed stainless steel wire by granting a tariff concession that eliminates the duty on these goods, thereby addressing a gap in the availability of competitively priced materials for Australian businesses. The instrument was introduced to ensure that no substitutable goods were produced in Australia at the time of the application, aligning with the policy objective to support domestic industries by providing access to affordable imported goods where local production is not feasible.
Scope and Application
The Customs Act 1901, under Part XVA, establishes a framework for Tariff Concession Orders (TCOs) that are administered by the Chief Executive Officer of Customs (CEO) to provide lower rates of customs duty on certain goods. This legislation applies to any individual or entity seeking to import goods that are not specified in section 269SJ of the Act, which excludes certain goods from being subject to a TCO. To qualify for a TCO, the goods must not have any substitutable equivalent produced in Australia in the ordinary course of business on the date the application is lodged, as defined under sections 269D and 269E of the Act. Once the CEO determines that an application meets these core criteria, a written order is made, as illustrated by Tariff Concession Order No. 0610733 for certain annealed stainless steel wire. This particular order was made effective from 23 June 2006, the date the application was lodged, and it applies a free rate of duty on the specified goods, replacing the general rate of 5%. The CEO is also required to publish a notice in the Gazette inviting public submissions on the TCO application, although in this instance, no submissions were received. The order does not affect the rights of any person as at the date of registration and does not impose any liabilities on individuals or entities other than the Commonwealth.
Key Provisions
The main operative sections of this legislation, namely Tariff Concession Order No. 0610733, outline the process by which certain annealed stainless steel wire can be subject to a concession on customs duty. Specifically, section 269F of the Customs Act 1901 allows for an application to be made to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). If the application is not in respect of goods specified in section 269SJ, which excludes certain goods from TCOs, the CEO must determine whether the application meets the core criteria as stipulated in section 269C. If satisfied, the CEO must issue a written TCO, as per section 269P(3), declaring the goods to which the concession applies. In this case, the CEO determined that the annealed stainless steel wire qualified for a concession, reducing the duty from 5% to free.
The Act imposes specific obligations on the parties involved. The applicant, Contract Investments Pty Ltd, must ensure that the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business. This requirement is defined under sections 269D and 269E of the Customs Act 1901. The CEO has the duty to assess the application against these criteria and to make a determination within the legislative framework. Additionally, the CEO is mandated to publish a notice in the Gazette under subsection 269K(1), inviting any person who believes the TCO should not proceed to lodge a submission. In this instance, no submissions were received, leading to the issuance of TCO No. 0610733.
In terms of potential breaches and consequences, the Act does not explicitly detail offences or penalties for failing to comply with the TCO provisions. However, any non-compliance with the Customs Act 1901, including the failure to adhere to the conditions of a TCO, could lead to civil or criminal penalties. For customs-related offences, penalties can be severe, including substantial fines and, in some cases, imprisonment. The exact penalties would depend on the specific breach and the severity of the violation as determined by the courts.
The commencement of the TCO is governed by subsection 269S(1) of the Act, which states that a TCO is effective from the date the application is lodged. Therefore, TCO No. 0610733 came into effect on 23 June 2006, the date the application was made. Importantly, the TCO does not affect the rights of any person, except the Commonwealth, in a manner that disadvantages them or imposes liabilities for actions taken before the TCO's registration. Importers of the affected goods can benefit by applying for a refund of duty paid on imports since the TCO's effective date, as outlined in paragraph 126(1)(r) of the Regulations.