EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0819444
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.
Sun Metals Corporation applied for a TCO in respect of certain zinc concentrate roaster cooling coils on 17 July 2008.
Instrument
TCO No 0819444 was made on 10 October 2008. It declares that those certain zinc concentrate roaster cooling coils 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. 0819444 is taken to have come into force on 17 July 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 Customs Act 1901, enacted by the Parliament of Australia, facilitates the application of tariff concessions on certain goods to encourage economic efficiency and competitiveness. Specifically, the Act allows for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs), which reduce or eliminate customs duty on specified goods. This mechanism was introduced to address the gap where certain imported goods did not have locally produced alternatives, thereby making it economically viable to import these goods at a lower cost. The policy objective is to support industries by ensuring that they have access to competitively priced inputs, thus enhancing their operational efficiency and global competitiveness. Instrument No. 0819444, issued on 10 October 2008, exemplifies this process by granting tariff concessions on certain zinc concentrate roaster cooling coils, effectively reducing the customs duty on these goods from 5% to free, thereby benefiting importers and the broader industry.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to any individual or entity seeking a concession on the customs duty applicable to imported goods, provided such goods are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The Act mandates that a TCO can only be issued if no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. The TCO applies nationally across Australia and is implemented through subordinate instruments, which may further detail the conditions and criteria for concessions. There are no reported exclusions or exemptions, except for the specified goods in section 269SJ. The Tariff Concession Instrument No. 0819444, issued on 10 October 2008, exemplifies this process by granting a duty-free status to certain zinc concentrate roaster cooling coils, effective from 17 July 2008, the date the application was lodged. This specific TCO does not affect any existing rights or impose new liabilities on persons other than the Commonwealth.
Key Provisions
The main sections of the Customs Act 1901 pertinent to this Tariff Concession Order (TCO) include section 269F, which allows for applications to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. Section 269C specifies that an application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. This means that if the CEO determines that no similar goods were manufactured domestically, they must consider the application further. If the application meets the core criteria, the CEO is required under section 269P(3) to issue a written TCO, as was done in TCO No. 0819444 for zinc concentrate roaster cooling coils. This order specifies that these particular goods are to be treated under item 50 of Schedule 4 to the Customs Tariff Act 1995, granting them a duty-free status.
The Customs Act 1901 imposes several obligations on the parties involved in this process. The CEO is required to assess whether an application for a TCO meets the core criteria and, if so, to issue a written TCO. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may oppose the granting of the TCO. Sun Metals Corporation, as the applicant, must ensure that their application is complete and meets all the statutory requirements, including providing any necessary information or evidence that supports their case. Once the TCO is issued, it becomes effective on the date the application was lodged, as per subsection 269S(1).
Failure to comply with the provisions of the Customs Act 1901 or the terms of the TCO can result in various legal consequences. While the explanatory statement does not specify particular offences or penalties related to the issuance of TCOs, breaches of the Customs Act generally can lead to civil or criminal penalties. The potential penalties for breaches of the Customs Act include fines, imprisonment, or both, depending on the severity of the offence and the specific provisions violated. The exact penalties are detailed in other parts of the Act and related legislation, but they can be significant, reflecting the importance of compliance with customs regulations.