EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0705688
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.
Sumikin Bussan Oceania Pty Ltd applied for a TCO in respect of certain high alloy hot rolled bars on 02 July 2007.
Instrument
TCO No 0705688 was made on 14 September 2007. It declares that those certain high alloy hot rolled 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. 0705688 is taken to have come into force on 02 July 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 a comprehensive framework for the administration of customs duties and related matters in Australia. Specifically, Part XVA of the Act allows for the establishment of Tariff Concession Orders (TCOs), which reduce customs duties on certain goods. The Act was designed to address the need for a flexible tariff regime that can respond to specific economic and trade conditions by offering duty relief on goods for which no substitutable domestic product exists. The enacting body of the Customs Act 1901 is the Australian Parliament, with the policy objective being to facilitate trade and economic growth by providing tariff relief where appropriate. The 2007 Tariff Concession Instrument No. 0705688 exemplifies this by providing a duty-free concession on certain high alloy hot rolled bars, responding to an application from Sumikin Bussan Oceania Pty Ltd.
Scope and Application
The Customs Act 1901 applies to any individual or entity involved in the import or export of goods in Australia, including businesses, importers, exporters, and the Chief Executive Officer of Customs who administers the Act. The Act establishes a scheme for Tariff Concession Orders (TCOs) which can be applied for by any person seeking a lower rate of customs duty on specified goods. The Act's jurisdiction extends across Australia, affecting all states and territories uniformly. It does not apply to goods specified in section 269SJ of the Act, which lists items ineligible for tariff concessions. The Act allows for the creation of subordinate instruments to specify particulars of the TCOs, such as the instrument made in 2007 for certain high alloy hot rolled bars. This instrument exempts these goods from the general customs duty rate, setting it at free, effective from the date of application for the concession. The Act ensures that the rights of individuals or entities are not adversely affected by the application of a TCO, particularly in terms of liabilities incurred prior to the TCO's registration.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0705688 under the Customs Act 1901 involve the granting of Tariff Concession Orders (TCOs) to reduce customs duty on certain goods. Section 269F (1) allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO, provided that the goods are not specified in section 269SJ as ineligible. The CEO must assess whether the application meets the core criteria as outlined in section 269C, which is determined by whether no substitutable goods were produced in Australia on the day the application was lodged, as per section 269D and 269E. If these criteria are satisfied, the CEO is required to make a TCO under section 269P(3), declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties and entities it governs are primarily on the CEO, who must evaluate applications against the specified criteria and, if appropriate, issue a TCO. Importers and other stakeholders must ensure their applications are valid and meet the statutory requirements, including the absence of substitutable goods produced in Australia. The CEO must also consult the public by publishing a notice in the Gazette under section 269K(1), inviting submissions on why a TCO should not be made, although no submissions were received for this particular TCO.
Breaches of the requirements or misuse of TCOs can lead to significant consequences. While specific offences are not detailed in the explanatory statement, general provisions under the Customs Act 1901 include penalties for fraudulent or negligent actions. The maximum penalties for customs offences can include substantial fines and imprisonment, depending on the severity of the breach. Importers and exporters must comply with all terms and conditions of a TCO to avoid any potential penalties or legal action. Failure to adhere to the regulations could result in the imposition of duties at the standard rate or other financial liabilities.