EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0900456
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.
Unidrive Pty Ltd applied for a TCO in respect of certain high alloy bars on 12 January 2009.
Instrument
TCO No 0900456 was made on 03 April 2009. It declares that those certain high alloy 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. 0900456 is taken to have come into force on 12 January 2009.
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. 0900456, made under the Customs Act 1901, was enacted in 2009 to address the specific issue of tariff concessions for certain high alloy bars. The purpose of this legislation is to provide a lower rate of customs duty on goods that do not have substitutable Australian-made alternatives, thus encouraging imports of goods that cannot be produced domestically. The Tariff Concession Order (TCO) was applied for by Unidrive Pty Ltd on 12 January 2009, and after the Chief Executive Officer of Customs was satisfied that the application met the core criteria, a written order was issued on 3 April 2009. This order made the certain high alloy bars subject to a free rate of duty, as opposed to the general rate of 5%. The legislative process involved publishing a notice in the Gazette inviting submissions, none of which were received, and the TCO was taken to have come into force on the date the application was lodged. This legislation ensures that the rights of importers are beneficially affected and does not impose any liabilities on any person other than the Commonwealth.
Scope and Application
The Customs Act 1901, as outlined in Tariff Concession Instrument No. 0900456, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which apply to specific goods to reduce or eliminate customs duty. The Act applies to any person or entity that applies for a TCO in relation to goods that are not specified in section 269SJ of the Act, ensuring that the goods do not already have a domestic production that could substitute for the imported goods. The application of a TCO is contingent upon the CEO determining that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. The geographic reach of this Act is national, as it pertains to the importation of goods into Australia. The Act allows for the extension or restriction of its application through subordinate instruments, such as regulations, which may further define the criteria for TCO applications and the specific conditions under which they apply. There are no stated exclusions or exemptions within the Act itself, but certain goods are inherently excluded by reference to section 269SJ.
Key Provisions
The main operative sections of the Customs Act 1901, as referenced in the Explanatory Statement for Tariff Concession Instrument No. 0900456, involve the process by which Tariff Concession Orders (TCOs) can be made and enforced. Section 269F allows an individual to apply for a TCO in respect of specific goods. Section 269C stipulates that for the TCO application to meet the core criteria, no substitutable goods should be produced in Australia in the ordinary course of business on the day the application is lodged. Section 269P(3) mandates that if the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria, a written order (TCO) must be made, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applicable to the goods in question.
The Act imposes several obligations on parties involved. The CEO must decide whether the TCO application meets the core criteria, ensuring no substitutable goods are produced in Australia. Once a TCO is made, the CEO is required to publish a notice in the Gazette, inviting submissions from any person who believes there are reasons why the TCO should not be made, as per section 269K(1). The CEO must also consider these submissions before finalising the TCO.
Failure to comply with the provisions of the Act can result in various penalties and consequences. While the Explanatory Statement does not specify exact civil or criminal penalties for non-compliance with the TCO, it is implied that breaches could lead to legal actions under the Customs Act. These may include fines or other penalties as stipulated in the Act for non-compliance with customs regulations. The precise penalties would be determined based on the nature and severity of the breach.
In summary, the Customs Act 1901 provides a structured process for applying and granting TCOs, with specific criteria that must be met for an application to be considered valid. The Act also mandates certain obligations on the CEO, including the publication of notices and consideration of submissions. While specific penalties for breaches are not detailed, the potential for legal repercussions underscores the importance of adherence to the Act's provisions.