EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0613750
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 shells on 22 August 2006.
Instrument
TCO No 0613750 was made on 10 November 2006. It declares that those certain ball mill shells 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. 0613750 is taken to have come into force on 22 August 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 Commonwealth Parliament, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This legislative mechanism aims to address the problem of providing tariff concessions on specific goods by reducing customs duty rates for these items. This concession is contingent upon the absence of substitutable goods produced in Australia at the time of the application. Tariff Concession Instrument No. 0613750, made in 2006, is an example of this process, where OneSteel Manufacturing Pty Ltd successfully applied for a TCO on certain ball mill shells, leading to a duty rate reduction from 5% to free. The instrument's objective aligns with the policy of facilitating trade by reducing the financial burden on importers of these specific goods, thus encouraging their importation.
Scope and Application
The Tariff Concession Instrument No. 0613750, under Part XVA of the Customs Act 1901, applies to any individual or entity that seeks tariff concessions for specific goods, in this case certain ball mill shells, as determined by the Chief Executive Officer of Customs. This legislation specifically targets the goods listed in the application, which in this instance are those manufactured by OneSteel Manufacturing Pty Ltd. The geographic and jurisdictional reach of this Act is national, as it pertains to the Commonwealth of Australia, with its application extending to any party involved in the importation of the specified goods. The Act allows for tariff concessions to be granted if certain criteria are met, particularly if no substitutable goods are produced in Australia at the time of application. This particular instrument was made to provide a zero rate of duty on the specified ball mill shells, down from the general rate of 5%. The Act does not impose any liabilities on any person and ensures that the rights of existing importers are not adversely affected by the concession. Any exclusions or limitations are detailed in section 269SJ of the Act, which specifies the goods that cannot be subject to a TCO. The application and enforcement of this Act may be further defined or extended through subordinate instruments as needed.
Key Provisions
The main operative sections of this legislation (F2006L03727) are sections 269C, 269B, 269D, 269E, 269F, 269K, 269P, and 269SJ of the Customs Act 1901, which together establish the framework for Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. Section 269C specifies 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. Definitions for terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269B, 269D, and 269E respectively. Section 269P(3) mandates that if the CEO is satisfied that a TCO application meets the core criteria, a written order must be made declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. The application of TCO No. 0613750 to certain ball mill shells, as outlined in this legislation, is an example of how these provisions work in practice.
The Customs Act 1901 imposes several obligations on the parties involved in the process of applying for and granting a TCO. The CEO is required to assess whether an application meets the core criteria and, if so, to make a written order declaring the goods to which the TCO applies. The applicant, such as OneSteel Manufacturing Pty Ltd, must ensure that their application is made in good faith and that it meets all specified criteria. The CEO must also publish a notice in the Gazette inviting submissions from any person who considers there are reasons why the TCO should not be made, as per section 269K(1). These obligations are designed to ensure that the process is transparent, fair, and that all relevant interests are considered before a TCO is granted.
Failure to comply with the provisions of the Customs Act 1901 and the associated regulations can result in various civil and criminal consequences. For example, if a person knowingly makes a false statement in an application for a TCO, they may be subject to criminal penalties, including fines and imprisonment, as provided under section 269X of the Act. Additionally, any person who knowingly contravenes the provisions of the Customs Act 1901 may be liable to civil penalties, including fines. The specific penalties can vary depending on the nature and severity of the breach, but they are intended to enforce compliance and uphold the integrity of the customs duty system.
In summary, TCO No. 0613750, as outlined in this legislation, provides tariff concessions for certain ball mill shells, reducing their customs duty rate from 5% to free. The key sections of the Customs Act 1901 that govern this process include 269C, 269B, 269D, 269E, 269F, 269K, 269P, and 269SJ. The obligations under the Act require the CEO to assess TCO applications and the applicant to ensure their application is valid. Breaches of the Act can result in significant penalties, including criminal charges and fines, underscoring the importance of compliance with the legislation.