EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0705877
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.
CMC (Australia) Pty Ltd applied for a TCO in respect of certain extruded aluminium alloy bars or rods on 23 April 2007.
Instrument
TCO No 0705877 was made on 29 June 2007. It declares that those certain extruded aluminium alloy bars or rods 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. 0705877 is taken to have come into force on 23 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 was enacted by the Australian Parliament to regulate the importation of goods into Australia and the collection of customs duty. This Act facilitates the introduction of Tariff Concession Orders (TCOs) to provide reduced customs duties on certain goods, as outlined in Part XVA of the Act. The objective of this legislation is to support Australian industries by lowering the cost of imported goods, thus making them more competitive in the domestic market. The explanatory statement indicates that the Tariff Concession Instrument No. 0705877 was introduced to address the specific needs of industries by granting tariff concessions on certain extruded aluminium alloy bars or rods, thereby reducing their customs duty from 5% to free, effective from the date of the application, 23 April 2007. The decision to grant this concession was made after considering that no substitutable goods were produced in Australia at the time of the application, fulfilling the core criteria stipulated under the Act.
Scope and Application
The Tariff Concession Instrument No. 0705877, issued under Part XVA of the Customs Act 1901, applies to specific goods for which a Tariff Concession Order (TCO) has been sought and granted by the Chief Executive Officer of Customs. This Act enables a lower rate of customs duty for goods specified in a TCO, and CMC (Australia) Pty Ltd successfully applied for a TCO for certain extruded aluminium alloy bars or rods, reducing their duty rate to zero. The application of this TCO is limited to goods for which no substitutable products are produced in Australia, ensuring that the concession does not undermine local production. The scope of the legislation extends nationally, affecting all importers of the specified goods within Australia. The Act mandates that no liabilities are imposed on any person, including importers, for actions taken prior to the TCO's effective date, thereby protecting existing rights and obligations. Any person considering a TCO application must adhere to the core criteria outlined in the Act, and the CEO is obligated to publish notices in the Gazette to invite submissions, although in this case, no submissions were received. The TCO came into force on the date the application was lodged, which was 23 April 2007, and it does not extend to impose any new liabilities or disadvantage any person other than the Commonwealth.
Key Provisions
The Customs Act 1901 (the Act) under which Tariff Concession Orders (TCOs) can be made, is structured to allow for a reduced rate of customs duty on specific goods. Section 269F of the Act allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods, provided they are not specified in section 269SJ. If the application is deemed valid and meets the core criteria, the CEO must make a written order declaring that the goods in question are subject to a prescribed tariff item from Schedule 4 to the Customs Tariff Act 1995 (the Tariff), as outlined in section 269P(3). For instance, CMC (Australia) Pty Ltd successfully applied for a TCO for certain extruded aluminium alloy bars or rods on 23 April 2007, which was subsequently made by the CEO on 29 June 2007, resulting in TCO No. 0705877. This TCO applied item 50 of Schedule 4 to the Tariff, setting the duty rate at zero, down from the general rate of 5%.
The Act imposes several obligations on the parties involved. Section 269C specifies that for a TCO application to meet the core criteria, no substitutable goods must be produced in Australia in the ordinary course of business on the day the application was lodged. Definitions for terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269F, respectively. Additionally, section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. The CEO must consider these submissions in making a decision.
Failure to comply with the requirements of the Act can lead to various consequences. While specific offences and penalties are not detailed in the provided text, breaches of the Act or the Regulations could result in legal action. The Act does not specify particular penalties, but generally, breaches of customs legislation can lead to fines and other civil or criminal penalties under Australian law. The TCO itself does not impose any liabilities on any person and does not affect the rights of a person as at the date of registration, except to the beneficial effect of the rights of importers who can apply for a refund of duty under paragraph 126(1)(r) of the Regulations.