EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618625
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 rail car impact buffers on 17 November 2006.
Instrument
TCO No 0618625 was made on 09 February 2007. It declares that those certain rail car impact buffers 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. 0618625 is taken to have come into force on 17 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, enacted by the Parliament of Australia, governs the importation and exportation of goods into and out of Australia, including the imposition of customs duty. The Act includes provisions under Part XVA for Tariff Concession Orders (TCOs), which allow the Chief Executive Officer of Customs to reduce the customs duty on specified goods if certain criteria are met. This mechanism was introduced to address gaps in the availability and affordability of specific goods that could be subject to concessions if they were not produced domestically or if there were no substitutable goods produced in Australia. The policy objective is to facilitate trade by reducing the cost of importing certain goods, thereby supporting industries that rely on these imports. In this context, Tariff Concession Instrument No. 0618625 was issued following an application by Onesteel Manufacturing Pty Ltd for a concession on rail car impact buffers, which were granted a zero percent duty rate, significantly reducing the cost for importers of these goods.
Scope and Application
The Customs Act 1901, specifically Part XVA, establishes a framework under which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs (CEO). This Act applies to any individual or entity seeking to import goods that may be eligible for a lower rate of customs duty under a TCO. The scope of the Act extends nationally, impacting various industries and transactions involving the importation of goods subject to tariff concessions. Exclusions apply to goods specified in section 269SJ of the Act, which outlines those that cannot be subject to a TCO. The application process involves meeting core criteria, such as the absence of substitutable goods produced in Australia, as defined by section 269C. The CEO's decision to grant a TCO is further guided by subsection 269P(3), which mandates the issuance of a written order specifying the applicable item from Schedule 4 of the Customs Tariff Act 1995. Once a TCO is registered, it generally benefits importers by allowing them to apply for a refund of duty on goods imported since the effective date of the concession, without imposing any new liabilities on any party.
Key Provisions
The main operative sections of the Customs Act 1901, particularly in relation to Tariff Concession Orders (TCOs), are sections 269C, 269F, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. Section 269C stipulates that a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the application meets these core criteria, section 269P requires the CEO to make a written order, a TCO, declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. Section 269S governs the commencement of a TCO, which is deemed to have come into force on the day the application was lodged.
The Act imposes specific obligations and requirements on both the applicant and the CEO. For the applicant, the primary obligation is to ensure their application is valid and meets the core criteria outlined in section 269C. This involves demonstrating that no substitutable goods were produced in Australia on the day the application was lodged. For the CEO, the obligations include accepting the application if it is valid, considering whether it meets the core criteria, and if so, making a written TCO. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. The CEO is also required to consider any submissions received and decide accordingly.
In terms of offences, penalties, or consequences for breach, the Customs Act 1901 does not explicitly detail penalties for failing to comply with the TCO provisions. However, breaches of the Act generally can lead to civil or criminal consequences depending on the nature and severity of the breach. For instance, under section 234 of the Act, a person who makes a false statement or representation in connection with the import or export of goods can face a maximum penalty of 10,000 penalty units or imprisonment for five years, or both. Similarly, failing to comply with customs regulations can result in penalties such as fines or imprisonment, as outlined in various sections of the Act. The TCO itself does not impose any liabilities on any person, but general compliance with customs laws and regulations is mandatory to avoid any legal repercussions.