EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804042
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 Pty Ltd applied for a TCO in respect of certain alloy aluminium on 12 March 2008.
Instrument
TCO No 0804042 was made on 30 May 2008. It declares that those certain alloy aluminium 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. 0804042 is taken to have come into force on 12 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. 0804042, enacted in 2008, is an instrument under the Customs Act 1901 that addresses the problem of facilitating tariff concessions for specific goods that are not produced in Australia. This instrument was introduced to ensure that certain goods, in this case, specific alloy aluminium, can benefit from a lower rate of customs duty as long as there are no substitutable goods produced domestically. The instrument was enacted by the Chief Executive Officer of Customs, who has the authority to make Tariff Concession Orders (TCOs) under section 269F of the Act. The policy objective is to encourage the importation of goods that are not produced locally by offering tariff relief, thereby supporting industry needs and potentially lowering consumer prices. This instrument specifically addresses the application made by CMC Pty Ltd for tariff concessions on certain alloy aluminium, resulting in a duty-free rate for these goods.
Scope and Application
The Tariff Concession Instrument No. 0804042 under the Customs Act 1901 applies to entities or individuals who seek tariff concessions on specific goods imported into Australia. This Act enables the Chief Executive Officer of Customs to grant a Tariff Concession Order (TCO) that reduces or eliminates the customs duty on specified goods if certain criteria are met, such as the absence of substitutable goods produced in Australia. The legislation extends to the entire Commonwealth of Australia and affects the import transactions of the goods in question. It is pertinent to note that the application of this Act is subject to exclusions outlined in section 269SJ of the Act, which lists goods that cannot be the subject of a TCO. The Act may also extend its application through subordinate instruments, although this specific Explanatory Statement does not detail such extensions. The TCO in question, No. 0804042, was applied to certain alloy aluminium, reducing the duty from 5% to free, and came into effect from 12 March 2008, the date the application was lodged.
Key Provisions
The main operative sections of this Tariff Concession Order (TCO) are sections 269C, 269B, 269D, 269E, 269P, and 269K of the Customs Act 1901. Section 269C sets the core criteria for the Chief Executive Officer of Customs (CEO) to consider when deciding whether to grant a TCO. This includes ensuring that no substitutable goods were produced in Australia at the time the application was lodged (section 269C). The definitions of key terms such as 'goods produced in Australia' (section 269D), 'ordinary course of business' (section 269E), and'substitutable goods' (section 269B) are crucial for determining whether the application meets the core criteria. If the CEO is satisfied that the application meets these criteria, they must issue a written order, declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (section 269P). The CEO must also publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made (section 269K).
The Customs Act 1901 imposes several obligations on the parties involved in the TCO process. The CEO is required to assess whether the application meets the core criteria outlined in section 269C and to make a written order if satisfied. This includes verifying that no substitutable goods were produced in Australia as defined in section 269D and were in the ordinary course of business as defined in section 269E. The CEO must also publish a notice in the Gazette (section 269K) and consider any submissions received. The applicant, in this case CMC Pty Ltd, must provide all necessary information and evidence to support their application, ensuring that it complies with the criteria specified in the Act. Importers who benefit from the TCO are required to apply for a refund of duty on goods imported since the TCO came into force under paragraph 126(1)(r) of the Regulations.
Failure to comply with the requirements of the Customs Act 1901 may result in various consequences. Although the explanatory statement does not specify penalties for non-compliance, breaches of customs regulations generally can lead to civil and criminal penalties. Civil penalties may include fines, while criminal penalties may include imprisonment. The maximum penalties would depend on the specific breach and the provisions of the Customs Act and related regulations. The Act also ensures that the rights of persons other than the Commonwealth are not adversely affected by the TCO, and it does not impose any new liabilities on any person.
Overall, the Tariff Concession Order No. 0804042 streamlines the customs duty process for certain alloy aluminium, benefiting importers by eliminating the duty on these goods. The process is governed by the detailed provisions of the Customs Act 1901, ensuring that the CEO's decisions are transparent and inclusive of stakeholder input.