EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803409
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.
Performance Metals Australlia Pty Ltd applied for a TCO in respect of certain seamless alloy steel on 29 February 2008.
Instrument
TCO No 0803409 was made on 16 May 2008. It declares that those certain seamless alloy steel 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. 0803409 is taken to have come into force on 29 February 2008.
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 Tariff Concession Instrument No. 0803409 was enacted under the Customs Act 1901, addressing the need for tariff concessions on specific goods to enhance trade efficiency and support domestic industries. This instrument was introduced to provide relief from customs duties for certain seamless alloy steel products, facilitating smoother trade practices and potentially reducing costs for businesses involved in the importation of these goods. The Australian Parliament enacted this legislation to allow the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that lower customs duties on eligible goods, provided they meet specified criteria and are not substitutable by Australian-produced goods. This initiative aims to promote fair trade practices and support the competitive position of Australian industries in the global market.
Scope and Application
The Tariff Concession Instrument No. 0803409 under the Customs Act 1901 applies to the specific seamless alloy steel goods that Performance Metals Australia Pty Ltd applied for, and it was made by the Chief Executive Officer of Customs. The Act provides a scheme whereby Tariff Concession Orders (TCOs) can be made to apply a lower rate of customs duty to goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. The geographic reach of this legislation is national, as it pertains to the application of the Customs Act 1901 across Australia. The TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person, but it does beneficially affect the rights of importers by potentially allowing them to apply for a refund of duty on goods imported since the TCO came into force. This legislation extends its application through subordinate instruments such as the Customs Tariff Act 1995.
Key Provisions
The Customs Act 1901, particularly Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Section 269F permits a person to apply to the CEO for a TCO in respect of goods, provided these goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. If an application meets the core criteria, outlined in section 269C, the CEO must make a TCO declaring that the goods are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995. The key criterion in section 269C is that no substitutable goods were produced in Australia on the day the application was lodged.
Entities and individuals subject to this Act must ensure their applications for TCOs comply with the stipulations in sections 269C and 269F. The CEO must verify that no substitutable goods were produced in Australia and that the application is not for goods listed in section 269SJ. If the application meets these criteria, the CEO is mandated to make the TCO. Furthermore, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from interested parties, although no such submissions were received for TCO No. 0803409.
Breaches of the obligations outlined in the Customs Act 1901 may result in various consequences. While the Act does not explicitly state specific offences or penalties for failure to comply with TCO provisions, general provisions within the Act and related regulations may apply. For example, non-compliance with customs regulations can lead to penalties under the Customs Act, which include fines and potential imprisonment. The exact penalties depend on the severity of the breach and the specific sections of the Act that are contravened.
The TCO No. 0803409, which was made on 16 May 2008, declared that certain seamless alloy steel are subject to a free rate of duty, differing from the general rate of 5%. This concession is effective from 29 February 2008, the date the application was lodged. Importantly, the TCO does not affect the rights of any person, except the Commonwealth, in a manner that would disadvantage them or impose liabilities for actions taken before the TCO was registered. Importers of the affected goods can apply for a refund of duty paid on imports made since the TCO came into effect.