EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0702193
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 Limited applied for a TCO in respect of certain inert gas monolithic lances on 22 February 2007.
Instrument
TCO No 0702193 was made on 18 May 2007. It declares that those certain inert gas monolithic lances 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. 0702193 is taken to have come into force on 22 February 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 manage the customs duties on imported goods, among other things, and to establish a framework for tariff concession orders. Tariff Concession Order No. 0702193 was introduced to provide tariff relief on certain inert gas monolithic lances, as requested by OneSteel Manufacturing Pty Limited. This Instrument was made under the authority of the Chief Executive Officer of Customs and is designed to ensure that the goods in question are not substitutable by any goods produced in Australia. The policy objective, as outlined in the explanatory statement, is to allow for the concession of customs duty on the specified goods, which is otherwise at a general rate of 5%, to be free of duty for the duration of the concession. This tariff relief aims to support the importer's rights by allowing them to apply for duty refunds on the specified goods imported since the effective date of the concession.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework whereby the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs) to apply a lower rate of customs duty on certain goods. These orders are applicable to goods specified in a TCO, and the process begins when a person applies to the CEO for such an order. For the CEO to consider the application, it must not pertain to goods listed in section 269SJ of the Act, which excludes certain goods from being subject to a TCO. If the CEO determines that the application meets the core criteria outlined in section 269C, which requires that no substitutable goods are produced in Australia at the time the application was lodged, a TCO is issued. This concession applies nationally across Australia and impacts the importation of specified goods, providing them with a reduced or free rate of duty as stipulated in the Customs Tariff Act 1995. The application of TCOs does not retroactively affect the rights of any person, except the Commonwealth, ensuring that there is no imposition of liabilities for actions taken prior to the order's registration. Instead, it potentially benefits importers by allowing them to claim refunds for duties paid on eligible goods since the effective date of the TCO.
Key Provisions
The main operative sections of this legislation, specifically under the Customs Act 1901, pertain to the creation and implementation of Tariff Concession Orders (TCOs) (sections 269F, 269C, 269B, 269D, 269E, 269P). Section 269F allows for the application of TCOs for goods that are not specified in section 269SJ, provided the application meets the core criteria as outlined in section 269C. This requires that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, with definitions provided in sections 269B, 269D and 269E. If the Chief Executive Officer (CEO) is satisfied that the application meets these criteria, a written order is made, as per section 269P(3). This particular instrument, TCO No. 0702193, concerns inert gas monolithic lances and specifies that they are subject to a zero duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995.
The obligations and requirements imposed by this Act on parties and entities revolve around the application process and the conditions under which a TCO can be granted. The CEO is mandated to assess applications and determine whether they meet the core criteria, specifically focusing on the production of substitutable goods in Australia. Once a TCO is issued, it is imperative for all parties to adhere to the specified duty rates and other customs regulations associated with the goods in question. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette, inviting submissions from any interested parties regarding the proposed TCO. In this instance, the CEO did not receive any submissions.
In terms of offences, penalties, or consequences for breach, the Customs Act 1901 and associated regulations do not specify particular penalties for failing to comply with the provisions of a TCO or the application process. However, non-compliance with customs regulations generally can lead to various penalties. These may include financial penalties, confiscation of goods, or legal action under the Customs Act or other relevant legislation. It is important for all parties to ensure adherence to the terms of the TCO to avoid potential civil or criminal liabilities. The rights of importers are protected, and they can apply for refunds of duty under the Customs Act Regulations, as per paragraph 126(1)(r), if they have paid duty on goods imported since the TCO came into force.