EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0825942
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.
Allthread Industries Pty Ltd applied for a TCO in respect of certain steel wire on 11 August 2008.
Instrument
TCO No 0825942 was made on 31 October 2008. It declares that those certain steel wire 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. 0825942 is taken to have come into force on 11 August 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 Australian Parliament, provides a framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs) which can apply lower rates of customs duty to certain goods. The Tariff Concession Instrument No. 0825942 was introduced to address the specific need for a tariff concession for certain steel wire products, as identified by Allthread Industries Pty Ltd. This instrument was enacted to ensure that these products benefit from a reduced customs duty rate, provided that no substitutable goods were being produced in Australia at the time of the application. The policy objective behind this measure is to support domestic industries by making imported goods more competitively priced, thereby encouraging trade and economic growth without imposing any new liabilities or disadvantaging existing rights holders.
Scope and Application
The Tariff Concession Instrument No. 0825942 applies to the goods specified in the instrument, namely certain steel wire, and to the parties involved in the importation of these goods into Australia. The Act under which this instrument is made, the Customs Act 1901, provides a scheme for Tariff Concession Orders (TCOs) that may be made by the Chief Executive Officer of Customs. This scheme allows for a lower rate of customs duty on goods that are the subject of a TCO. The application for a TCO must meet the core criteria set out in the Act, specifically that no substitutable goods were produced in Australia on the day the application was lodged. The instrument is effective across the Commonwealth of Australia and applies to all importers of the specified goods from the date the application was lodged. There are no exclusions or exemptions stated within the text, although the Act itself contains provisions for goods that cannot be subject to a TCO. The application of the TCO may be extended or modified through subordinate instruments as necessary.
Key Provisions
The main operative sections of the Customs Act 1901, as applied through Tariff Concession Instrument No. 0825942, concern the process of applying for and granting Tariff Concession Orders (TCOs). Section 269F allows any person to apply to the Chief Executive Officer (CEO) of Customs for a TCO for certain goods (269F). The CEO must assess the application against the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged (269C, 269D, 269E). If satisfied that these criteria are met, the CEO is obligated to issue a written order declaring that the goods in question are subject to a prescribed tariff concession, as specified in the Customs Tariff Act 1995 (269P(3)).
The obligations imposed by the Act on the parties involved are primarily centred around the application process and the criteria assessment. The CEO must ensure that applications are evaluated according to the specified criteria, and if a TCO application is deemed to meet these criteria, the CEO is required to issue a TCO (269K(1)). Allthread Industries Pty Ltd, the applicant in this case, must have satisfied the CEO that no substitutable goods were produced in Australia, as required by section 269C. Additionally, the CEO has a duty to publish a notice in the Gazette inviting submissions on the application, which was done in this instance, although no submissions were received (269K(1)).
Breaching the provisions of the Customs Act 1901 can lead to various consequences. Although the Act does not explicitly state offences, penalties, or specific civil/criminal consequences for non-compliance with TCO provisions, the act of applying for a TCO under false pretences or providing misleading information could potentially lead to penalties under other sections of the Customs Act, such as providing false information or engaging in fraudulent activities. The maximum penalties for such offences can vary, but they generally include fines and imprisonment, depending on the severity and intent of the breach. The Act ensures that the TCO does not affect any pre-existing rights or impose liabilities on individuals or entities other than the Commonwealth (269S(1)).