EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0835477
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.
Sumikin Bussan Oceania applied for a TCO in respect of certain cold drawn bars on 15 October 2008.
Instrument
TCO No 0835477 was made on 14 January 2009. It declares that those certain cold drawn bars 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. 0835477 is taken to have come into force on 15 October 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, established a framework for the regulation of customs and excise in Australia. This Act provides the basis for the introduction of Tariff Concession Orders (TCOs), which allow for the reduction or exemption of customs duty on specific goods. The Act was enacted to streamline the process for applying for tariff concessions and ensure that the application criteria are met transparently and efficiently. This legislation was introduced to address the need for a structured process to assess and approve tariff concessions, ensuring that such concessions are granted only when certain criteria are satisfied, particularly when no substitutable goods are produced in Australia. Tariff Concession Instrument No. 0835477, made under this Act, exemplifies the application of these provisions, where the CEO of Customs determined that no substitutable goods were produced in Australia for certain cold drawn bars, thus granting a tariff concession that resulted in a duty-free status for these goods.
Scope and Application
The Tariff Concession Instrument No. 0835477 applies to goods specified in the instrument, namely certain cold drawn bars, and the application of the Customs Act 1901 to those goods. The instrument was made by the Chief Executive Officer of Customs under the authority granted by Part XVA of the Customs Act 1901, which pertains to Tariff Concession Orders (TCOs). The Act applies to any individual or entity that imports the specified goods, allowing them to benefit from a lower rate of customs duty, in this case, a rate of free duty as opposed to the general rate of 5%. The instrument operates on a Commonwealth level, with its provisions extending across Australia as governed by the Customs Act 1901. The scope of the Act does not include goods specified in section 269SJ of the Act, which details those goods that cannot be subject to a TCO. The Act's application can be extended or restricted through subordinate instruments, but in this instance, no such modifications have been noted.
Key Provisions
The main operative sections of this legislation are sections 269C, 269F, 269P, and 269S, which provide the framework for the application and granting of Tariff Concession Orders (TCOs) (269C, 269F, 269P, 269S). Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. If the CEO is satisfied that the application meets the core criteria set out in section 269C, they must make a written order declaring that the goods are to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (269C, 269P). The TCO will come into force on the day the application was lodged (269S).
The obligations imposed by this Act on parties include the requirement for the CEO to consider applications for TCOs and to make an order if the application meets the core criteria (269C, 269F, 269P). The CEO must also publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made (269K). Furthermore, the Act mandates that a TCO does not affect the rights of a person as at the date of registration in a way that disadvantages them or imposes liabilities for actions taken before the registration date (269S).
For breaches of the provisions outlined in the Customs Act 1901, the Act does not explicitly detail specific offences, penalties, or consequences for non-compliance with the TCOs. However, given the nature of the Act and its purpose, any misuse or non-compliance with the terms of a TCO could potentially lead to legal consequences under other sections of the Customs Act 1901, including fines and imprisonment for serious breaches such as fraud or smuggling. The maximum penalties for such offences can vary significantly depending on the severity of the breach. It is also important to note that failure to adhere to the requirements of publishing notices and considering submissions in the Gazette could result in administrative penalties or legal challenges from affected parties.