EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0700893
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.
Swiss Steel International Australia Pty Ltd applied for a TCO in respect of certain bars and/or rods on 16 January 2007.
Instrument
TCO No 0700893 was made on 13 April 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. 0700893 is taken to have come into force on 16 January 2007.
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 duties, and it was introduced to address the need for a structured and consistent approach to the administration of customs duties in Australia. One of its key provisions allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) to provide tariff concessions on certain goods, provided specific criteria are met. This mechanism was established to support Australian industries by potentially reducing the customs duty on imported goods, thus making them more competitive against locally produced substitutes. The Parliament of Australia enacted this Act, with the aim of facilitating trade while protecting domestic industries from unfair competition. The explanatory statement for Tariff Concession Instrument No. 0700893 further illustrates the process by which such concessions are granted, emphasising that the policy objective is to ensure that tariff relief is available where no suitable Australian-made alternatives exist, thereby fostering a fair trading environment.
Scope and Application
The Customs Act 1901, under its Part XVA, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer (CEO) of Customs, which can apply a lower rate of customs duty on specific goods. This applies to any person who meets the core criteria set out in the Act, which includes the absence of substitutable goods being produced in Australia in the ordinary course of business. This legislation is applicable across the Commonwealth of Australia, with the scope potentially being extended or restricted through subordinate instruments. The process involves an application by an interested party, review by the CEO, and publication of the application in the Gazette, allowing for public submissions which, in this instance, did not occur. Notably, the application of the TCO does not affect existing rights or impose liabilities on anyone other than the Commonwealth, and it provides benefits such as duty refunds for importers of the specified goods. The TCO No. 0700893, made in respect of certain bars and/or rods, exemplifies the application of these provisions by setting the duty rate for these goods at 0%, effective from the date of the application, 16 January 2007.
Key Provisions
The Tariff Concession Instrument No. 0700893 made under the Customs Act 1901 provides for a lower rate of customs duty on certain bars and/or rods. According to section 269F of the Act, an application for a Tariff Concession Order (TCO) can be made by a person to the Chief Executive Officer of Customs (CEO). If the CEO determines that the application is valid and meets the core criteria, a TCO is made. Section 269C of the Act states that the core criteria are met if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. This specific TCO, No. 0700893, was made on 13 April 2007 and specifies that certain bars and/or rods are subject to a 0% duty rate instead of the general 5% rate.
The obligations imposed by the Act on the parties and entities it governs include the requirement for the CEO to assess applications for TCOs against the core criteria set out in section 269C. The CEO must also ensure that the application does not pertain to goods specified in section 269SJ of the Act, which are ineligible for TCOs. Furthermore, as per section 269K(1) of the Act, the CEO is mandated to publish a notice in the Gazette inviting any interested parties to submit any reasons why the TCO should not be made. In this instance, no submissions were received in response to the published notice.
In terms of civil and criminal consequences for breach, the Customs Act 1901 does not explicitly outline specific offences or penalties related to non-compliance with the TCO provisions. However, general provisions in the Act, such as section 246, may apply, which deals with penalties for breaches of the Customs Act and associated regulations. The penalties for such breaches can include fines and, in severe cases, imprisonment. The precise penalties would depend on the nature and severity of the breach, as well as any relevant case law and regulatory guidelines. The Act ensures that the rights of importers will be beneficially affected and that the TCO does not impose any liabilities on any person, including the Commonwealth.