EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0713009
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.
Stoddart Metals Pty Ltd applied for a TCO in respect of certain copper bar on 16 August 2007.
Instrument
TCO No 0713009 was made on 02 November 2007. It declares that those certain copper 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. 0713009 is taken to have come into force on 16 August 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 Commonwealth Parliament to regulate the import and export of goods, including the imposition and collection of customs duty. It introduced a framework under which Tariff Concession Orders (TCOs) could be made, allowing for the reduction of customs duty on certain goods under specific conditions. This legislative measure was introduced to address the need for flexibility in tariff regulations to support industries and businesses that rely on imported materials. TCOs ensure that Australian industries can compete effectively by reducing the cost of imported goods that do not have a domestic alternative. The Tariff Concession Instrument No. 0713009, made on 2 November 2007, exemplifies this process by granting a concession to Stoddart Metals Pty Ltd for certain copper bars, reducing the duty rate from 5% to free, effective from 16 August 2007, the date the application was lodged.
Scope and Application
The Tariff Concession Instrument No. 0713009 applies to goods specified in the instrument, namely certain copper bars, which are now subject to a lower rate of customs duty under the Customs Act 1901. The Act enables the Chief Executive Officer of Customs to grant tariff concessions through Tariff Concession Orders, provided certain criteria are met. The scope of this particular TCO extends to the goods listed in the instrument and affects those who import such goods into Australia. The instrument's application is national, aligning with the overarching provisions of the Customs Act 1901, which is a Commonwealth Act. The TCO does not apply to goods specified in section 269SJ of the Act, which are ineligible for tariff concessions. The instrument also does not disadvantage any person or impose liabilities for actions taken prior to its registration. Any person, including importers, can apply for such concessions, and the process involves the CEO reviewing the application against the core criteria outlined in the Act. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties, although in this case, no submissions were received. The TCO comes into force on the day the application was lodged, which in this instance was 16 August 2007.
Key Provisions
The Tariff Concession Instrument No. 0713009, under section 269F of the Customs Act 1901, outlines the process for applying for a Tariff Concession Order (TCO), which allows for a lower rate of customs duty on certain goods. An applicant must submit an application to the Chief Executive Officer of Customs (CEO), who then assesses whether the application meets the core criteria, primarily focusing on whether substitutable goods are produced in Australia. If the application satisfies these criteria, the CEO must issue a written TCO (section 269P(3)), as seen in the case of Stoddart Metals Pty Ltd, where a TCO was granted for certain copper bars, reducing their duty rate from 5% to free.
The Act imposes several obligations on the parties involved. For the applicant, it requires a formal application to the CEO (section 269F), which must be made in good faith and supported by relevant information. The CEO, on the other hand, has the duty to determine whether the application meets the core criteria (section 269C) and to make a written TCO if the criteria are met (section 269P(3)). Furthermore, the CEO must publish a notice in the Gazette inviting any interested parties to submit submissions regarding the TCO (subsection 269K(1)), though no submissions were received in this case.
Breaching the conditions set forth by the Customs Act 1901 can lead to civil and criminal consequences. While the explanatory statement does not detail specific offences under this Act, it is understood that any misrepresentation or false information provided in a TCO application could lead to penalties, including fines and potential imprisonment. The precise penalties would be determined based on the severity of the breach and in accordance with the relevant provisions of the Customs Act 1901 and associated regulations. Additionally, any failure to comply with the terms of a granted TCO could result in the nullification of the concession, leading to the re-application of standard duty rates.