EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618148
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 molten metal lance guides on 2 November 2006.
Instrument
TCO No 0618148 was made on 19 January 2007. It declares that those certain molten metal lance guides 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. 0618148 is taken to have come into force on 2 November 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 Tariff Concession Instrument No. 0618148, enacted in 2007, amends the Customs Act 1901 to address a specific economic and trade policy gap concerning the imposition of customs duties on imported goods. This instrument was introduced to provide tariff relief for certain molten metal lance guides, a product for which no substitutable goods were produced in Australia at the time of application. The Tariff Concession Orders (TCOs) scheme under Part XVA of the Customs Act 1901 allows for reduced customs duty rates for goods specified in a TCO, provided they meet the core criteria set out in the Act, notably the absence of substitutable goods produced domestically. The instrument was developed in response to an application by Onesteel Manufacturing Pty Ltd, and after a consultation period where no objections were raised, it was gazetted by the Chief Executive Officer of Customs. The policy objective of this instrument is to support Australian industry by reducing the cost of importing certain goods, thus fostering a competitive market environment.
Scope and Application
The Tariff Concession Instrument No. 0618148, made under the Customs Act 1901, applies to Onesteel Manufacturing Pty Ltd in respect of certain molten metal lance guides. The Act facilitates the application for Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, who may impose lower rates of customs duty on specified goods. The application for TCOs is subject to the condition that no substitutable goods are produced in Australia, as per the criteria outlined in sections 269C, 269D, 269E, and 269F of the Act. This particular TCO was made on 19 January 2007, and it applies to item 50 of Schedule 4 of the Customs Tariff Act 1995, effectively reducing the duty on the specified molten metal lance guides from 5% to 0%. The geographic reach of this Act is national, applying across Australia. The Act does not impose any liabilities on persons other than the Commonwealth and does not disadvantage anyone in respect of actions taken prior to the registration date of the TCO.
Key Provisions
The main operative sections of this legislation are sections 269C, 269B, 269D, 269E, and 269P of the Customs Act 1901. Section 269C outlines the core criteria that must be met for a Tariff Concession Order (TCO) to be considered valid. Specifically, it requires that on the day the application for the TCO was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The definitions of "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269B, 269D, and 269E respectively. If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they must make a written TCO, as outlined in section 269P(3).
The obligations imposed on the parties by this Act include the requirement for the CEO to carefully evaluate each TCO application against the specified criteria. This involves verifying that no substitutable goods were produced in Australia on the day the application was lodged. Furthermore, the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not proceed. The Act also mandates that the TCO does not affect the rights of any person, other than the Commonwealth, in a way that would disadvantage them or impose liabilities for actions taken prior to the TCO registration.
Breaches of the provisions set out in this Act can lead to civil or criminal consequences. While the explanatory statement does not specify the exact nature of these consequences, under general Australian legislation, failure to comply with customs regulations can result in penalties. These may include fines or imprisonment, depending on the severity of the breach. For instance, knowingly making a false statement in an application could attract criminal penalties, including fines up to $22,000 for individuals and significantly higher amounts for corporations, along with potential imprisonment. Additionally, failure to adhere to the terms of the TCO might lead to financial penalties or the revocation of the concession.
The explanatory statement also notes that the TCO does not impose any new liabilities on any person, ensuring that the rights of importers will be beneficially affected. Importers can apply for a refund of duty on goods imported since the TCO is taken to have come into force, as per paragraph 126(1)(r) of the Regulations. This provision highlights the Act's intent to provide relief to importers without imposing additional burdens on them. The Act ensures that the TCO serves its purpose of providing tariff concessions while maintaining fairness and transparency in the customs process.