EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803838
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.
Empire Resources Pacific Ltd applied for a TCO in respect of certain aluminium alloy plates, sheets or strip on 7 March 2008.
Instrument
TCO No 0803838 was made on 30 May 2008. It declares that those certain aluminium alloy plates, sheets or strip 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. 0803838 is taken to have come into force on 7 March 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. 0803838, enacted under the Customs Act 1901, addresses the need to provide tariff concessions on specific imported goods to promote economic efficiency and competitiveness. This instrument was introduced to facilitate the application process for Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, ensuring that the application aligns with the core criteria outlined in the Act. The instrument specifically concerns certain aluminium alloy plates, sheets, or strips, granting them a lower rate of customs duty or making them duty-free based on the absence of substitutable goods produced in Australia. The objective is to benefit importers by potentially allowing them to apply for a refund of duties paid on these goods since the date the TCO was taken to have come into effect.
This legislation, made under the authority of the Parliament of Australia, aims to streamline the process for granting tariff concessions, thereby enhancing trade efficiency and providing economic relief to importers. The instrument ensures that no pre-existing rights or liabilities of non-Commonwealth entities are adversely affected, focusing on the future application of the tariff concessions.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These TCOs are intended to reduce the rate of customs duty on certain goods, provided that they meet the core criteria outlined in the Act. The Act applies to individuals and entities who may apply for a TCO in respect of goods, and it applies nationally, within the Commonwealth of Australia. The scope of the Act is defined by the criteria in section 269C, which requires that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The Act excludes certain goods as specified in section 269SJ, which cannot be subject to a TCO. The application process involves a review by the CEO, who must ensure the application meets the core criteria before making a decision. The geographic and jurisdictional reach of the Act is national, applying across Australia, and the TCOs are effective from the date the application is lodged. The TCO No. 0803838, which concerns certain aluminium alloy plates, sheets, or strips, came into force on 7 March 2008, the date the application was lodged. The TCO does not affect the rights of any person other than the Commonwealth, nor does it impose any liabilities on any person.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) pertaining to Tariff Concession Orders (TCOs) include sections 269C, 269F, and 269SJ (section 269C). Section 269F allows an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a TCO for specific goods, provided those goods are not excluded under section 269SJ. If the application meets the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia at the time of the application, the CEO must issue a TCO. This TCO specifies a lower rate of customs duty for the goods in question, as detailed in Schedule 4 of the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved. Firstly, applicants must ensure their goods are not specified in section 269SJ, thereby disqualifying them from TCO consideration. The CEO has the responsibility to verify that the application meets the core criteria, which includes confirming that no substitutable goods were produced in Australia. If the criteria are met, the CEO must issue a written TCO. Furthermore, the CEO is obligated to publish a notice in the Gazette after accepting a TCO application as valid, inviting any interested parties to submit reasons why the TCO should not be made (section 269K).
In the event of a breach, the Act may impose civil or criminal penalties. While the explanatory statement does not detail specific offences or penalties, breaches of the Customs Act 1901 can generally lead to substantial fines and potential imprisonment. For instance, under section 234 of the Act, a person can be fined up to 10,000 penalty units for serious breaches. Additionally, entities that fail to comply with the TCO provisions might face financial penalties or other civil consequences as deemed appropriate by the courts. The severity of these penalties depends on the nature and extent of the breach, and they are designed to enforce compliance and uphold the integrity of the customs duty system.