EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701138
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.
Mitsubishi Australia Limited applied for a TCO in respect of certain hot rolled hexagonal bars on 22 January 2007.
Instrument
TCO No 0701138 was made on 13 April 2007. It declares that those certain hot rolled hexagonal bars 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. 0701138 is taken to have come into force on 22 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, enacted by the Australian Parliament, provides a framework for the administration of customs and excise, including the establishment of a scheme for Tariff Concession Orders (TCOs) under Part XVA. This scheme allows for the reduction or exemption of customs duty on certain goods, subject to certain criteria being met. The problem or gap this scheme addresses is the need to incentivise the import of goods that are not produced domestically, thereby supporting competitive markets and potentially lowering costs for consumers. The Tariff Concession Instrument No. 0701138, made on 13 April 2007, is an example of this scheme in action, where a lower rate of customs duty was applied to certain hot rolled hexagonal bars. The policy objective, as per the explanatory statement, is to ensure that the rights of importers are beneficially affected while not imposing any liabilities on any person other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0701138, issued under the Customs Act 1901, pertains to a Tariff Concession Order (TCO) for certain hot rolled hexagonal bars. This legislation applies to Mitsubishi Australia Limited, who applied for the concession on 22 January 2007, and any other entities seeking to import the specified goods. The primary purpose is to provide a lower rate of customs duty on these goods, contingent upon the absence of substitutable goods being produced in Australia. The scope of this Act is national, operating under the Commonwealth jurisdiction. The Act excludes goods specified in section 269SJ of the Customs Act 1901, which cannot be subject to a TCO. The application of the Act can be extended or restricted through subordinate instruments, as outlined in the Customs Tariff Act 1995. The TCO came into effect on the date of the application, 22 January 2007, and does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on any person.
Key Provisions
The primary operative sections of the Customs Act 1901, as applied in the Tariff Concession Instrument No. 0701138, include section 269C (2) which mandates that a Tariff Concession Order (TCO) application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged, as stipulated in section 269F. Under section 269P(3), if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they must make a written order declaring the goods subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. This particular instrument, TCO No. 0701138, declares that certain hot rolled hexagonal bars are subject to item 50 of Schedule 4, with the duty rate reduced from the general 5% to free.
The obligations imposed on parties governed by this Act include the requirement for applicants, such as Mitsubishi Australia Limited in this case, to ensure that their applications for a TCO are made in accordance with the statutory criteria, specifically that no substitutable goods were produced in Australia at the time of application. The CEO, upon receiving an application, must assess whether it meets the core criteria and, if satisfied, must issue the TCO. Additionally, the CEO is required to publish a notice in the Gazette inviting any interested parties to submit objections to the TCO, as outlined in section 269K(1). This process ensures transparency and allows for any potential concerns to be addressed.
Failure to comply with the requirements of the Customs Act 1901 or the terms of a TCO may result in various consequences. While specific offences and penalties are not detailed in this explanatory statement, breaches of customs laws generally can lead to civil or criminal penalties. These may include fines or imprisonment, depending on the severity of the breach. For instance, knowingly making a false statement in an application for a TCO could potentially lead to criminal charges, while a failure to declare goods correctly could result in civil penalties. It is crucial for applicants and the CEO to adhere strictly to the statutory provisions to avoid such repercussions.
The instrument also ensures that the rights of existing parties, such as importers, are protected. Under section 269S(1), the TCO is taken to have come into force on the day the application was lodged, thereby safeguarding the rights of importers who may now apply for a refund of duty on goods imported since the effective date. Importantly, the TCO does not impose any liabilities on any person for actions taken before the date of registration, thus preventing any retrospective disadvantage or liability imposition on individuals or entities.