EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0704382
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.
Thyssen Krupp VDM applied for a TCO in respect of certain stainless steel wire on 23 March 2007.
Instrument
TCO No 0704382 was made on 15 June 2007. It declares that those certain stainless steel wire 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. 0704382 is taken to have come into force on 23 March 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 Tariff Concession Instrument No. 0704382, enacted on 15 June 2007, is a legislative instrument made under the Customs Act 1901. This instrument was introduced to address the need for tariff concessions for certain goods, specifically certain stainless steel wire, as applied for by Thyssen Krupp VDM on 23 March 2007. The Customs Act 1901 provides a scheme for Tariff Concession Orders (TCOs), allowing for lower rates of customs duty on specified goods. The Tariff Concession Instrument was made by the Chief Executive Officer of Customs following a determination that no substitutable goods were produced in Australia, satisfying the core criteria for a TCO. The general rate of duty on these goods is 5%, but the rate for goods subject to the TCO is reduced to 0%. The enactment of this instrument is intended to benefit importers by potentially allowing them to apply for a refund of duty on goods imported since the TCO's effective date, without imposing any new liabilities on any person.
Scope and Application
The Tariff Concession Instrument No. 0704382, made under the Customs Act 1901, applies to specific stainless steel wire imported into Australia, granting a concessional rate of customs duty for these goods. The instrument targets importers of these particular stainless steel wires by reducing the duty rate from the general rate of 5% to 0%. This concession is applicable to any person or entity importing these goods into Australia, provided they meet the criteria outlined in the Customs Act 1901, such as the absence of substitutable goods produced in Australia. The geographic scope of this instrument is national, as it pertains to imports across Australia. Any person who believes that the concession should not be granted may lodge a submission with the Chief Executive Officer of Customs; however, in this instance, no such submissions were received. The instrument's application is effective from the date the application was lodged, which was 23 March 2007. Importantly, the instrument does not disadvantage any person other than the Commonwealth and does not impose liabilities on any person for actions taken before its registration. It also does not affect the rights of any person as at the date of registration.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0704382 under the Customs Act 1901 (section 269F) allow for the Chief Executive Officer (CEO) of Customs to make a Tariff Concession Order (TCO) on application, provided certain conditions are met. Specifically, section 269C of the Act mandates that the CEO must ensure that 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 these conditions are met, they must make a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, thereby applying a concessional rate of customs duty. In this instance, the TCO No. 0704382 applies a 0% duty rate on certain stainless steel wire, reducing the general rate of 5% (section 269P(3)).
The Act imposes specific obligations on the CEO when considering an application for a TCO. Firstly, under section 269K(1), the CEO must publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to submit their views to the CEO. This ensures transparency and provides an opportunity for interested parties to voice their concerns. Additionally, the CEO must ensure that the goods in question are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The CEO must also confirm that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). If these conditions are satisfied, the CEO must proceed to make the TCO.
Breaching the provisions of the Customs Act 1901 or the Customs Tariff Act 1995 can result in both civil and criminal consequences. Under section 253 of the Customs Act 1901, any person who knowingly makes a false or misleading statement in an application for a TCO may be liable for a civil penalty of up to $22,200 for a corporation and $4,440 for an individual, or imprisonment for up to two years, or both. Furthermore, under section 252 of the same Act, any person who contravenes a provision of the Act in relation to the making of a TCO may also be subject to criminal penalties, including fines and imprisonment. The Act also includes provisions for the recovery of any overpaid duty in cases where a TCO is found to have been incorrectly applied.