EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0718813
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.
Global Metals Pty Ltd applied for a TCO in respect of certain steel blooms on 2 November 2007.
Instrument
TCO No 0718813 was made on 30 January 2008. It declares that those certain steel blooms 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. 0718813 is taken to have come into force on 2 November 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 Parliament of Australia to provide a framework for the administration of customs and excise duties. The introduction of Tariff Concession Orders (TCOs) under Part XVA of the Act was designed to address the need for tariff reductions on certain imported goods, ensuring they are not subject to higher customs duties when there are no substitutable goods produced domestically. This mechanism allows the Chief Executive Officer of Customs to grant tariff concessions on specific goods, provided that no substitutable goods are produced in Australia in the ordinary course of business at the time of the application. The policy objective is to facilitate the importation of goods that are not locally produced, thereby supporting industries and consumers by reducing the cost of these goods. The explanatory statement details the process for applying for a TCO, the criteria for approval, and the implications of such an order, including the ability for importers to apply for a refund of duties on goods imported since the effective date of the TCO.
Scope and Application
The Tariff Concession Instrument No. 0718813, made under the Customs Act 1901, applies to goods specified in the instrument, namely certain steel blooms, and pertains to the process of applying for and obtaining a Tariff Concession Order (TCO). This Act applies to any person or entity that seeks a reduction in customs duty on specified goods by applying for a TCO, ensuring that the goods in question are not substitutable by goods produced in Australia. The Act operates under a Commonwealth jurisdiction and extends to any person or entity involved in the importation of the specified goods. It does not apply to goods listed in section 269SJ of the Customs Act 1901, which outlines those goods that cannot be subject to a TCO. The application and approval of a TCO are subject to the CEO's assessment based on the core criteria, including the non-existence of substitutable goods produced in Australia. Additionally, the Act allows for the extension or restriction of its application through subordinate instruments as required.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0718813, which was made under the Customs Act 1901, include section 269F, which allows a person to apply for a Tariff Concession Order (TCO) in respect of goods. Section 269C requires the Chief Executive Officer of Customs (CEO) to determine whether the application meets the core criteria, which are primarily concerned with whether there are substitutable goods produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets these criteria, they must make a written order declaring the goods to which the concession applies (section 269P(3)). In this case, Instrument TCO No. 0718813 was made on 30 January 2008, declaring that certain steel blooms are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, resulting in a free rate of duty on these goods.
The Act imposes several obligations and requirements on the parties involved. The CEO must ensure that the application for a TCO is not in respect of goods specified in section 269SJ, which outlines goods that cannot be subject to a TCO. The CEO must also publish a notice in the Gazette as soon as practicable after accepting the TCO application as valid, inviting any person who believes the TCO should not be made to lodge a submission (subsection 269K(1)). In this instance, no submissions were received by the CEO. Furthermore, under the Regulations, importers of the affected goods can apply for a refund of duty on goods imported since the TCO is taken to have come into force, which is the date the application was lodged (paragraph 126(1)(r)).
Any breach of the obligations and requirements set out in the Customs Act 1901 may lead to various civil and criminal consequences. The Act does not specify maximum penalties for breaches related to TCOs, but it does provide that the CEO can impose fines and penalties for other breaches under the Act, such as incorrect declarations or fraudulent behaviour. Additionally, under general criminal law provisions, any person found guilty of an offence related to the Customs Act could face imprisonment, fines, or both, depending on the severity of the offence. The specific penalties would be determined by the courts based on the circumstances of each case.