EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0705137
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.
AMAC Corrosion applied for a TCO in respect of certain zinc ribbons on 4 April 2007.
Instrument
TCO No 0705137 was made on 29 June 2007. It declares that those certain zinc ribbons 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. 0705137 is taken to have come into force on 4 April 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, establishes a framework through which Tariff Concession Orders (TCOs) can be issued to provide tariff reductions on specific goods. This legislation was introduced to address the need for more flexible and responsive customs duty measures that can cater to specific economic conditions or industry needs. The instrument F2007L02230, also known as Tariff Concession Instrument No. 0705137, was developed to provide tariff concessions for certain zinc ribbons, reducing their duty rate from 5% to 0%. This initiative was made in response to an application by AMAC Corrosion, following a process where the Chief Executive Officer of Customs (CEO) assessed that no substitutable goods were produced in Australia. The CEO's decision to grant the concession was made without any submissions opposing the TCO, and the order is effective from the date of the application, 4 April 2007. The policy objective behind this concession is to support the import industry by reducing the duty burden on specific goods, thereby potentially stimulating trade and economic activity.
Scope and Application
The Tariff Concession Instrument No. 0705137 under the Customs Act 1901 applies to the particular zinc ribbons specified in the instrument, which were the subject of an application by AMAC Corrosion. The Act permits the Chief Executive Officer of Customs to make Tariff Concession Orders that lower the rate of customs duty on certain goods, provided that the application meets certain core criteria, including that no substitutable goods were produced in Australia on the date the application was lodged. This instrument is effective from the date the application was lodged, 4 April 2007, and it exempts the specified zinc ribbons from the general customs duty rate of 5%, instead applying a rate of 0%. The instrument's reach is national, as it operates under the Commonwealth's authority. The CEO is required to publish a notice in the Gazette inviting submissions from any person who might have reasons why the concession should not proceed, although in this case, no submissions were received. The application of the Tariff Concession Order does not retroactively affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person.
Key Provisions
The Customs Act 1901 (the Act) contains a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO) (sections 269C and 269F). These orders apply a lower rate of customs duty to specific goods (section 269P). The application process for a TCO is set out in section 269F, whereby an individual or entity can apply to the CEO for a TCO in respect of goods. The CEO must then determine whether the application meets the core criteria, which involves ensuring that the goods in question are not specified in section 269SJ of the Act and that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (sections 269C, 269SJ, and 269D). If these criteria are met, the CEO must make a written order (a TCO) declaring the applicable goods and the prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) (subsection 269P(3)).
Entities or individuals applying for a TCO must ensure that their application satisfies the criteria set out in the Act. This includes verifying that the goods are not subject to exclusions listed in section 269SJ and that no substitutable goods were produced in Australia in the ordinary course of business on the date of the application. The CEO has a duty to publish a notice in the Gazette once a TCO application is accepted as valid, inviting any interested parties to submit objections or reasons why the TCO should not be made (subsection 269K(1)). If no submissions are received, the CEO proceeds to make the TCO.
Failure to comply with the requirements of the Act or breaching the conditions of a TCO could result in legal consequences. However, the explanatory statement does not detail specific offences or penalties related to the TCO process. Generally, under the Customs Act 1901, breaches of customs regulations can result in civil or criminal penalties. Civil penalties can include financial penalties and the confiscation of goods, while criminal penalties may include fines and imprisonment. The maximum penalties depend on the nature and severity of the offence.
In summary, the Customs Act 1901 provides a framework for the CEO to make Tariff Concession Orders that apply reduced customs duty rates to specific goods. Applicants must ensure their goods meet the eligibility criteria, and the CEO must publish notices inviting submissions before making a TCO. While the explanatory statement does not specify the penalties for breaches, general provisions of the Act suggest that non-compliance can lead to civil and criminal penalties.