EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0842824
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.
Heat and Control applied for a TCO in respect of certain steel banding on 05 December 2008.
Instrument
TCO No 0842824 was made on 27 February 2009. It declares that those certain steel banding 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. 0842824 is taken to have come into force on 05 December 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. 0842824 was enacted in 2009 under the Customs Act 1901, to facilitate the application of tariff concessions on specific imported goods. This legislation was introduced to address the need for a streamlined process through which the Chief Executive Officer of Customs could reduce customs duty rates on certain imported goods, provided that no substitutable goods were produced in Australia at the time of the application. The primary objective of this Act, as outlined in the explanatory statement, is to ensure that the application of tariff concessions is both fair and economically beneficial, particularly to importers who may benefit from the duty refunds on goods imported since the effective date of the Tariff Concession Order.
The instrument was made by the Chief Executive Officer of Customs, following the application by Heat and Control for a Tariff Concession Order concerning certain steel banding on 5 December 2008. The order was published in the Gazette, inviting any interested parties to submit objections, although none were received. The Tariff Concession Order No. 0842824 came into effect on the date the application was lodged, 5 December 2008, and it reduced the duty on these specific steel banding from the general rate of 5% to free, without imposing any liabilities on non-Commonwealth entities or disadvantaging any person’s rights as of the registration date.
Scope and Application
The Customs Act 1901, specifically through Tariff Concession Orders (TCOs) under Part XVA, allows the Chief Executive Officer (CEO) of Customs to reduce or eliminate customs duty on certain imported goods. These orders apply to goods for which no substitutable products are produced in Australia in the ordinary course of business. The CEO must assess applications against these criteria, and if satisfied, issue a written order specifying the lower duty rates. This process applies to individual and corporate applicants who seek tariff concessions for particular goods and affects the importation of those goods into Australia, subject to the specified duty rates. The geographic reach of the Act is national, applying across all states and territories of Australia. Goods that cannot be subject to a TCO are explicitly excluded under section 269SJ of the Act. The application process requires public notification, allowing any interested parties to voice their opposition to the concession. The TCO in question, made on 27 February 2009, pertains to certain steel banding and exempts it from the usual 5% duty rate, setting it to free duty instead, effective from 5 December 2008. The TCO does not retroactively affect any pre-existing rights or liabilities, and importers of the affected goods can apply for duty refunds from the date the TCO took effect.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0842824 (F2009L01434) under the Customs Act 1901 (section 269F) allow for the application for a Tariff Concession Order (TCO) by an individual or entity in respect of specific goods, provided the application meets the core criteria set out in section 269C. This criterion requires that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The CEO of Customs (section 269P(3)) must then make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 if satisfied that the application meets these criteria. In this instance, TCO No. 0842824 applies to certain steel banding, reducing the duty rate from 5% to free.
The Act imposes certain obligations on both the applicant and the CEO of Customs. For applicants (section 269F), it is necessary to lodge an application that meets the core criteria as outlined in section 269C. This involves demonstrating that no substitutable goods are produced in Australia. The CEO (subsection 269K(1)) must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not proceed. In this case, no submissions were received. The CEO must also ensure that the TCO is made if the application meets the core criteria, and the TCO must come into force on the day the application was lodged (subsection 269S(1)).
There are no specific offences or penalties mentioned in the explanatory statement for the breach of the provisions under this TCO. However, the Customs Act 1901 does provide for various offences and penalties related to the general administration of customs duties and the making of false statements or misrepresentations in applications. These offences could result in both civil and criminal consequences, with penalties varying depending on the severity of the breach. For instance, knowingly making a false statement could result in fines or imprisonment.
The TCO itself does not disadvantage any person or impose liabilities on anyone other than the Commonwealth. Specifically, the rights of importers will be beneficially affected under this order, as they can apply for a refund of duty on goods imported since the day the TCO came into force (paragraph 126(1)(r) of the Regulations). This means that importers who imported the goods before the TCO was registered will not be disadvantaged or have any new liabilities imposed on them.