EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0823945
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.
Sanwa Pty Ltd applied for a TCO in respect of certain high alloy steel bars or rods on 30 July 2008.
Instrument
TCO No 0823945 was made on 24 October 2008. It declares that those certain high alloy steel bars or rods 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. 0823945 is taken to have come into force on 30 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, establishes a framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs) to provide relief to certain goods. The Act was introduced to streamline the process of obtaining tariff reductions on specific goods, ensuring that Australian industries can access necessary materials without prohibitive costs. This instrument, F2008L04248, specifically addresses the application by Sanwa Pty Ltd for tariff concessions on high alloy steel bars or rods, reducing the duty from 5% to free, effective from the date of application, 30 July 2008. The decision to grant the concession was made by the Chief Executive Officer of Customs, who was satisfied that no substitutable goods were produced in Australia. The policy objective behind this concession is to support Australian industries by providing them with competitively priced raw materials, thereby promoting economic efficiency and growth.
Scope and Application
The Customs Act 1901, under Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This legislation applies to any person who may apply for a TCO for specific goods, provided that the application does not pertain to goods listed in section 269SJ of the Act. The CEO must assess whether the application meets the core criteria set out 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 applies to the Commonwealth jurisdiction, and the scope of its application is further extended or restricted through subordinate instruments. Exclusions from this scheme include goods specified in section 269SJ, and the Act does not disadvantage or impose liabilities on persons other than the Commonwealth in respect of actions taken before the TCO's registration. The TCO in question, No. 0823945, was applied to certain high alloy steel bars or rods, reducing the general rate of duty from 5% to free, and was effective from the date the application was lodged, 30 July 2008.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0823945, made under the Customs Act 1901, involve the application for and granting of a Tariff Concession Order (TCO) for specific goods, in this case certain high alloy steel bars or rods. Section 269F of the Act allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO is satisfied that the application is valid and meets the core criteria as outlined in sections 269C, 269B, and 269D, they must make a written order declaring that the goods in question are subject to a prescribed tariff concession. Section 269P(3) further mandates that the CEO must issue a TCO if satisfied that no substitutable goods are produced in Australia. In this instance, the TCO No. 0823945 was made on 24 October 2008, applying to certain high alloy steel bars or rods under item 50 of Schedule 4 to the Customs Tariff Act 1995, effectively granting them a duty-free status.
The obligations and requirements imposed by the Act on the parties involved are primarily centred around the application and approval process for a TCO. The CEO must ensure that the application is valid and that it meets the core criteria set out in the Act. This involves verifying that no substitutable goods are produced in Australia on the day the application is lodged. Additionally, the CEO is required to publish a notice in the Gazette inviting any interested parties to submit objections or reasons why the TCO should not be made. In this case, the CEO did not receive any submissions, indicating that the TCO application for the high alloy steel bars or rods was unchallenged.
In terms of offences, penalties, or consequences for breach, the Act does not specify any criminal penalties for failing to comply with the TCO process. However, any breach of the conditions set out in the TCO itself could result in civil consequences for the parties involved. For instance, if the goods subject to the TCO are not used for the purposes specified, or if there are any discrepancies in the import documentation, the importer could be subject to penalties under the Customs Act, including financial penalties or the forfeiture of the goods. The maximum penalties for such breaches are not explicitly stated in the explanatory statement but would typically align with the general provisions of the Customs Act.