EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618435
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 filters on 10 November 2006.
Instrument
TCO No 0618435 was made on 2 February 2007. It declares that those certain filters 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. 0618435 is taken to have come into force on 10 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 Customs Act 1901 was enacted to provide for the regulation of customs and excise in Australia. This Act was introduced to address the need for a streamlined and efficient process for granting tariff concessions on certain goods, ensuring that Australian businesses could compete fairly in the global market. The Tariff Concession Instrument No. 0618435, made under the authority of the Customs Act 1901, was introduced by the Parliament of Australia to address specific concerns regarding the availability and cost of particular goods within the Australian market. The policy objective of this instrument is to facilitate the importation of goods that are not produced domestically, thereby reducing costs and increasing availability for Australian consumers and businesses, without imposing any disadvantage to existing rights or liabilities.
Scope and Application
The Customs Act 1901 applies to individuals and entities seeking tariff concessions for goods imported into Australia. Specifically, it concerns businesses, importers, and other stakeholders who are interested in reducing or eliminating customs duties on certain goods. The Act facilitates the application process for Tariff Concession Orders (TCOs) through the Chief Executive Officer of Customs, who must assess whether the application meets the core criteria, such as the absence of substitutable goods produced in Australia. The geographic reach of the Act is national, encompassing all areas under Commonwealth jurisdiction. The Act includes exclusions for goods specified in section 269SJ, which cannot be subject to a TCO. Subordinate instruments may further extend or restrict the application of the Act by detailing specific procedures and criteria for TCOs. This particular Act benefits importers by potentially allowing them to apply for refunds of duty on goods imported since the TCO came into effect.
Key Provisions
The Customs Act 1901 provides a framework for the implementation of Tariff Concession Orders (TCOs), as outlined in Part XVA, allowing for the reduction of customs duties on specified goods. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO, provided the goods are not specified in section 269SJ, which lists those goods ineligible for a TCO. If the CEO determines that the application meets the core criteria, as defined by section 269C, a TCO is issued under section 269P(3), effectively lowering the customs duty on the specified goods. For instance, in the case of Instrument TCO No 0618435, certain filters were subject to a 0% duty rate instead of the general 5% rate, as the CEO found no substitutable goods produced in Australia.
The Act imposes several obligations on parties applying for a TCO. Firstly, the applicant must ensure that the goods in question are not listed in section 269SJ. Secondly, the CEO must assess whether the application meets the core criteria, which includes verifying that no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. The CEO must also publish a notice in the Gazette inviting submissions from interested parties, as required by section 269K(1). In the specific case of Instrument TCO No 0618435, Onesteel Manufacturing Pty Ltd successfully applied for a TCO for certain filters, and the CEO did not receive any submissions opposing the TCO.
In terms of potential breaches and consequences, the Customs Act 1901 outlines various offences and penalties for non-compliance with its provisions. While specific penalties are not detailed in the explanatory statement, general sections of the Act and related legislation typically provide for fines and imprisonment for breaches. For instance, knowingly making a false statement in an application for a TCO could result in substantial fines or imprisonment, as per sections 241 and 242 of the Act. Furthermore, any misuse of a TCO, such as applying it to ineligible goods, could lead to financial penalties and the forfeiture of any benefits obtained from the concession.
Overall, the Tariff Concession Instrument No. 0618435 demonstrates the Act's procedure for granting tariff concessions, highlighting the need for compliance with eligibility criteria and the transparency required through public consultation. The legal framework ensures that the application process is rigorous and that any benefits derived from a TCO are legitimate and in line with the Act's intent.