EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0610739
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 ball mill lubricators on 22 June 2006.
Instrument
TCO No 0610739 was made on 15 September 2006. It declares that those certain ball mill lubricators 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 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. 0610739 is taken to have come into force on 22 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 Parliament of Australia, provides a framework for the imposition and concession of customs duties on imported goods. Specifically, Part XVA of the Act outlines the process for Tariff Concession Orders (TCOs) which can be applied for by individuals or entities seeking reduced customs duty rates on certain goods. This mechanism was introduced to address the gap in providing tariff relief to goods where no Australian-made substitutes exist, thus encouraging trade and industry efficiency. The explanatory statement for the Tariff Concession Instrument No. 0610739 clarifies that such concessions aim to benefit the importing industry by potentially reducing the financial burden of customs duties, provided that the goods in question are not specified as ineligible under section 269SJ of the Act and meet the core criteria set out in sections 269C, 269B, and 269D. This particular instrument, made by the Chief Executive Officer of Customs on 15 September 2006, applies to certain ball mill lubricators, reducing their duty rate from 5% to free, effective from 22 June 2006.
Scope and Application
The Tariff Concession Instrument No. 0610739, made under the Customs Act 1901, applies to the specific goods, namely certain ball mill lubricators, and is targeted at the entity that applied for the tariff concession, OneSteel Manufacturing Pty Ltd. The legislation allows for a lower rate of customs duty on these goods, as specified by the instrument, if certain conditions are met. The Act allows the Chief Executive Officer of Customs to grant tariff concessions if no substitutable goods are produced in Australia in the ordinary course of business, and this condition was satisfied for the application in question. The instrument does not apply to any other goods or entities unless similarly situated and applying for a tariff concession under the same legislative provisions. The geographic reach of this Act is national, as it pertains to customs duties and the importation of goods into Australia.
The instrument extends the application of the Customs Act by providing specific details regarding the concession for the listed goods. It does not, however, exclude or exempt any goods or entities from its application unless explicitly stated in the Act or subsequent instruments. The commencement date of the TCO is the date on which the application was lodged, in this case, 22 June 2006, and it operates without retroactive effect, meaning it does not disadvantage or impose liabilities on persons for actions taken prior to its registration. This instrument, therefore, provides a clear and specific application of the broader scheme under the Customs Act for targeted tariff concessions.
Key Provisions
The primary sections of the Customs Act 1901 (the Act) that govern Tariff Concession Orders (TCOs) include sections 269C, 269B, 269D, 269E, and 269P, among others. Section 269C stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B defines key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods," which are essential in determining whether a TCO can be granted. Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, a written order (a TCO) must be made. For example, in the case of TCO No. 0610739, the CEO declared that certain ball mill lubricators were subject to a concession under the Customs Tariff Act 1995 because no substitutable goods were produced in Australia.
The Act imposes several obligations on the parties involved. An applicant, such as OneSteel Manufacturing Pty Ltd, must submit a valid application for a TCO to the CEO. The CEO, in turn, has the obligation to review the application and ensure it meets the core criteria outlined in section 269C. If the application is deemed valid, the CEO must issue a TCO. Furthermore, as per section 269K(1), the CEO is required to publish a notice in the Gazette, inviting any interested parties to submit submissions opposing the TCO. In this case, no submissions were received, allowing the TCO to proceed without opposition.
Failure to comply with the provisions of the Act can lead to various consequences. While the Act does not explicitly outline specific offences or penalties for breaches in the context of TCOs, general contraventions of the Customs Act 1901 can result in significant penalties. Under section 240 of the Act, any person who contravenes a provision of the Act or the regulations can be subject to fines and imprisonment. For example, knowingly making a false statement in an entry or document can lead to a penalty of up to five times the value of the goods involved, while more severe offences may result in fines of up to $22,000 and imprisonment for up to five years. Additionally, civil penalties may be imposed for breaches of the Customs Act 1901, which can include substantial financial penalties.
In summary, the key provisions of the Customs Act 1901 regarding TCOs focus on the criteria for granting concessions, the obligations of applicants and the CEO, and the potential consequences of non-compliance. Section 269C outlines the core criteria for a TCO, while sections 269B and 269P(3) define essential terms and mandate the issuance of a TCO when criteria are met. The CEO is required to publish notices and accept submissions, ensuring a transparent process. While specific penalties for TCO-related breaches are not detailed, general contraventions of the Act can lead to substantial fines and imprisonment, underscoring the importance of compliance with the statutory requirements.