EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0742882
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.
Cmi Forge Pty Ltd applied for a TCO in respect of certain bars or rods steel on 05 December 2008.
Instrument
TCO No 0842882 was made on 27 February 2009. It declares that those certain bars or rods steel 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. 0842882 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. 0742882, enacted under the Customs Act 1901, aims to facilitate tariff concessions on certain goods by establishing a streamlined process for applying for and granting Tariff Concession Orders (TCOs). The Act was enacted by the Australian Parliament to address the need for a flexible mechanism that allows for tariff reductions on specific goods not produced in Australia. The policy objective of this legislation is to provide economic benefits to importers by lowering customs duty rates on goods that do not have local substitutes, thereby enhancing competitiveness and potentially reducing costs for businesses importing these goods. The Chief Executive Officer of Customs is responsible for assessing applications and determining whether to issue a TCO based on the criteria outlined in the Act. The explanatory statement highlights that the particular instrument in question, TCO No. 0842882, was issued in response to an application by Cmi Forge Pty Ltd for tariff concessions on certain steel bars or rods, with the duty rate reduced from the general rate of 5% to free, effective from the date the application was lodged.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders apply a lower rate of customs duty to specified goods, provided certain conditions are met. An application for a TCO can be made by any person, but the CEO must ensure the goods are not specified in section 269SJ, which outlines goods that cannot be subject to a TCO. The CEO evaluates whether the application meets the core criteria, specifically if no substitutable goods are produced in Australia in the ordinary course of business. If satisfied, the CEO issues a written TCO, declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. The CEO is also required to publish a notice in the Gazette inviting submissions from interested parties, although in the case of TCO No. 0842882, no submissions were received. The TCO comes into effect on the date the application is lodged, benefiting importers by allowing them to apply for a refund of duty on goods imported since that date. The TCO does not affect existing rights or impose any liabilities on persons other than the Commonwealth.
Key Provisions
The Tariff Concession Instrument No. 0742882 primarily concerns the application and implementation of a Tariff Concession Order (TCO) for specific bars or rods steel as stipulated under section 269F of the Customs Act 1901 (the Act) (s269F). According to section 269C, a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (s269C). The Customs Act 1901 defines terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" through sections 269D, 269E, and 269P respectively (s269D, s269E, s269P). If the Chief Executive Officer of Customs (the CEO) is satisfied that these criteria are met, they must make a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, thus granting the concession (s269P(3)).
Under the Customs Act 1901, the CEO has specific obligations when processing a TCO application. These include determining whether the application meets the core criteria, as outlined in section 269C (s269C). Once the CEO is satisfied that the application is valid and meets these criteria, they must publish a notice in the Gazette, inviting submissions from any person who believes the TCO should not be made (s269K(1)). In this instance, no submissions were received in response to the published notice. Moreover, the CEO is required to make a written order declaring that the goods in question are subject to the specified concession, effectively reducing the customs duty from the general rate to zero for the specified bars or rods steel (s269P(3)).
The Customs Act 1901 outlines specific consequences for non-compliance with the provisions of a TCO. While the explanatory statement does not detail criminal or civil penalties, it is implied that failure to comply with the terms of a TCO could lead to legal repercussions. For instance, if an entity does not adhere to the conditions under which the concession was granted, it could potentially face legal action for misrepresentation or fraud. Additionally, the Act ensures that the TCO does not disadvantage any person or impose liabilities on anyone in respect of actions taken before the TCO came into effect (s269S(1)). This provision safeguards the rights of importers, allowing them to apply for a refund of duty on goods imported since the TCO's effective date (Reg 126(1)(r)).