EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618025
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 hot slag metal skimmers on 31 October 2006.
Instrument
TCO No 0618025 was made on 12 January 2007. It declares that those certain hot slag metal skimmers 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. 0618025 is taken to have come into force on 31 October 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 was enacted to facilitate the regulation of customs duties and border control in Australia. In 2007, the Tariff Concession Instrument No. 0618025 was introduced as a legislative tool under Part XVA of the Act to address the need for tariff concessions on specific goods that could not be substitutively produced in Australia. This instrument allows the Chief Executive Officer of Customs to grant tariff concessions when certain criteria are met, such as the absence of substitutable goods produced domestically. The policy objective of this measure is to support Australian industries by lowering customs duties on imported goods that have no local equivalent, thereby promoting competition and economic efficiency. This instrument, made under the authority of the Customs Act 1901, ensures that the rights of non-Commonwealth entities are not adversely affected while providing relief to importers of the specified goods.
Scope and Application
The Customs Act 1901, specifically Part XVA, governs the process through which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This Act applies to any person or entity that seeks to apply for a TCO in respect of goods, thereby qualifying them for a lower rate of customs duty. The Act's jurisdiction extends across the Commonwealth of Australia, and it applies to all goods unless they are specifically excluded under section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The application process involves the CEO assessing whether the core criteria set out in section 269C are met, particularly ensuring that no substitutable goods are produced in Australia in the ordinary course of business. The scope of the Act is further defined by terms such as 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods', as specified in sections 269D, 269E, and 269F respectively. The application and subsequent TCO, such as Tariff Concession Instrument No. 0618025, are effective from the date of the application, and the rights of importers are protected under the Act.
Key Provisions
The primary operative sections of the Customs Act 1901, as amended by the Tariff Concession Instrument No. 0618025, focus on the establishment of Tariff Concession Orders (TCOs) under section 269F (1). These sections detail the process by which an applicant can apply for a TCO (section 269F), the criteria that the CEO must assess to determine the validity of the application (sections 269C, 269B, and 269D), and the conditions under which a TCO may be made (section 269P). Specifically, section 269C outlines the core criteria that must be met for an application to be considered valid, including the absence of substitutable goods produced in Australia at the time of the application. Section 269P mandates the creation of a TCO if the CEO is satisfied that the application meets the core criteria, as evidenced in TCO No. 0618025, which applies to certain hot slag metal skimmers.
The Act imposes several obligations on the parties involved in the TCO process. The CEO is required to review applications for TCOs and ensure they meet the specified criteria (section 269C). The CEO must also publish a notice in the Gazette inviting submissions from interested parties if they believe the TCO should not proceed (subsection 269K(1)). If no submissions are received, as in the case of TCO No. 0618025, the CEO must proceed with making the order. Importers of the affected goods have the right to apply for a refund of duty paid on the goods since the TCO's effective date (paragraph 126(1)(r) of the Regulations). The Act ensures that the TCO does not adversely affect the rights of any person other than the Commonwealth, nor does it impose any new liabilities (subsection 269S(1)).
Breaches of the provisions in the Customs Act 1901 and associated regulations can result in various penalties and consequences. While the explanatory statement does not explicitly detail the penalties for non-compliance, the Customs Act generally includes provisions for both civil and criminal penalties. Civil penalties may include fines, while criminal penalties can range from fines to imprisonment, depending on the severity of the breach. The maximum penalties would be determined by the specific provisions of the Act and any relevant regulations, which may include the Customs Act 1901 itself or the Customs Regulations 1994. The precise penalties would depend on the nature and extent of the breach, such as fraudulent applications or misrepresentations in the application process.