EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619305
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.
Atlas Group Holdings Ltd applied for a TCO in respect of certain bars and/or rods on 5 December 2006.
Instrument
TCO No 0619305 was made on 2 March 2007. It declares that those certain bars and/or rods 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. 0619305 is taken to have come into force on 5 December 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 regulate the import and export of goods in Australia, including the imposition of tariffs and duties on imported goods. The Act introduced a scheme whereby Tariff Concession Orders (TCOs) could be made to provide concessions on customs duty for certain goods. The Tariff Concession Instrument No. 0619305, enacted in 2007, is an example of this scheme in action. The instrument was introduced to address the issue of providing tariff concessions for specific goods where no substitutable goods are produced in Australia. This is achieved by reducing or eliminating customs duty on these goods, thereby encouraging their importation and use within the country. The enacting body for this legislation is the Chief Executive Officer of Customs, who must determine whether an application for a TCO meets the core criteria outlined in the Act. The policy objective, as stated, is to provide tariff concessions where appropriate, promoting trade and economic efficiency by ensuring that goods for which no domestic alternatives exist are not subject to prohibitive duties.
Scope and Application
The Customs Act 1901 provides a framework through which the Chief Executive Officer of Customs may grant Tariff Concession Orders (TCO) that lower the rate of customs duty on certain goods. The Act applies to individuals or entities who apply for such concessions, specifically those who can demonstrate that the goods they seek to import are not produced domestically and thus cannot be substituted with Australian-made alternatives. This Act extends across the Commonwealth of Australia and applies to all industries and transactions involving the importation of goods subject to a TCO. The scope of the Act can be further defined through subordinate instruments, which may specify additional criteria or detail procedural requirements for applications. However, the Act excludes goods listed in section 269SJ, which are ineligible for tariff concessions regardless of production status. The application process requires public notice and allows for submissions from interested parties, although in this instance, no submissions were received. The commencement date of a TCO is considered to be the date of the application, ensuring that rights and liabilities are calculated from this point forward without retroactive disadvantage to non-Commonwealth entities.
Key Provisions
The Customs Act 1901, as amended, includes provisions that allow the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCOs) to lower customs duty rates on certain goods, provided they meet specific criteria (s 269F, s 269C). If an applicant, such as Atlas Group Holdings Ltd, submits an application for a TCO, the CEO must assess whether the goods in question are not substitutable by any goods produced in Australia (s 269C, s 269D, s 269E). If the CEO determines that the application meets these core criteria, they must issue a written order specifying that the goods are subject to a lower duty rate (s 269P(3)).
The obligations imposed on the parties governed by this Act include the requirement for applicants to ensure that their applications for TCOs are made in accordance with the provisions of the Customs Act 1901. The CEO has the responsibility to thoroughly review each application to determine if it meets the statutory criteria for a TCO. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may wish to oppose the granting of a TCO (s 269K(1)). Failure to follow these procedures can result in the application being invalid or the TCO being subject to legal challenge.
The Act does not explicitly outline specific offences, penalties, or civil/criminal consequences for breach related to the issuance of TCOs. However, the consequences of non-compliance with the requirements of the Customs Act 1901 generally could include fines and imprisonment under the general provisions of the Act. For instance, misleading or deceptive conduct in relation to customs and excise matters is an offence that can attract penalties (s 231). Additionally, the failure to adhere to the statutory obligations, such as the CEO not properly assessing an application or not publishing a notice in the Gazette, could result in legal action being taken against the CEO or the relevant entity for not following due process.