EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0905031
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.
Wilson Transformer applied for a TCO in respect of certain silicon electrical steel sheet or strip on 13 February 2009.
Instrument
TCO No 0905031 was made on 08 May 2009. It declares that those certain silicon electrical steel sheet or strip 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. 0905031 is taken to have come into force on 13 February 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. 0905031, enacted in 2009, was introduced to provide tariff concessions under the Customs Act 1901, specifically addressing the need for reduced customs duties on certain goods that are not produced in Australia and are not listed as ineligible in section 269SJ of the Act. This instrument was created to facilitate the application process for Tariff Concession Orders (TCOs) as outlined in Part XVA of the Customs Act, whereby the Chief Executive Officer of Customs (CEO) can apply a lower rate of customs duty on goods specified in a TCO. The policy objective is to encourage the import of goods that are not domestically produced, thereby supporting industries that rely on imported materials and fostering competitive markets.
The process for enacting this instrument involved the CEO evaluating the application from Wilson Transformer for tariff concessions on certain silicon electrical steel sheet or strip, which was accepted on 13 February 2009. Following the requisite checks to ensure that no substitutable goods were produced in Australia, the CEO issued TCO No. 0905031 on 8 May 2009. This instrument declared the specified goods as subject to a free duty rate, effective from the date of the application. The CEO also published a notice in the Gazette inviting any interested parties to submit objections, none of which were received. Consequently, the TCO came into force on the date of the application, ensuring that the rights of importers are beneficially affected without imposing any liabilities on non-Commonwealth entities.
Scope and Application
The Customs Act 1901, specifically Part XVA, provides the framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to individuals or entities seeking a reduction in customs duty on imported goods through a TCO. The application process involves the applicant lodging a request with the CEO, who then determines whether the application meets the core criteria as outlined in the Act, primarily focusing on the non-existence of substitutable goods produced in Australia at the time of application. The geographic reach of this Act is national, as it pertains to the Commonwealth's customs regulations. Exclusions under this Act include goods specified in section 269SJ, which cannot be subject to a TCO. Additionally, the Act allows for the extension or restriction of application through subordinate instruments, which may include further regulations or orders made under the authority of the Act. The application of a TCO does not retroactively disadvantage any person or impose liabilities for actions taken before the TCO's effective date, thereby protecting the rights of importers who may benefit from duty refunds on imports made after the TCO's effective date.
Key Provisions
The Customs Act 1901 (the Act) under which the Tariff Concession Instrument No. 0905031 operates, primarily through Part XVA, establishes a framework for Tariff Concession Orders (TCOs). A TCO allows for a lower rate of customs duty on goods that are subject to such an order. Specifically, Section 269F permits a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. If the CEO determines that the application pertains to goods that are not excluded under Section 269SJ, the application is assessed against the core criteria outlined in Section 269C. For a TCO application to meet these criteria, it must be established that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business.
The Act further elaborates on key terms such as "goods produced in Australia" (Section 269D), "ordinary course of business" (Section 269E), and "substitutable goods" (Section 269B). For instance, "substitutable goods" refers to products manufactured in Australia that could serve a similar function or design purpose as the goods specified in the TCO application. If the CEO is satisfied that the application meets the core criteria, they are required under Subsection 269P(3) to issue a written order, thereby establishing the TCO. This was the case with TCO No. 0905031, which was issued on 8 May 2009, applying to certain silicon electrical steel sheet or strip, and effectively granting them a duty-free status under item 50 of Schedule 4 to the Customs Tariff Act 1995 (the Tariff).
Entities and individuals subject to the provisions of the Customs Act, including those applying for or affected by a TCO, must adhere to the procedural and substantive requirements outlined in the Act. The CEO must publish a notice in the Gazette (Subsection 269K(1)) inviting submissions from any interested parties who may oppose the TCO. The CEO must then consider these submissions in their decision-making process. In the case of TCO No. 0905031, no submissions were received, facilitating an unimpeded process towards the issuance of the TCO. The TCO's commencement date aligns with the date the application was lodged (Subsection 269S(1)), ensuring that the rights of importers are protected and that they can apply for duty refunds on goods imported since the effective date of the TCO (Paragraph 126(1)(r) of the Regulations).
The Act does not impose any penalties for failure to comply with the TCO process itself, but breaches of other customs-related provisions could lead to civil or criminal consequences. For example, providing false or misleading information in an application could result in fines or imprisonment under the relevant sections of the Customs Act or other applicable legislation. The specific penalties for such offences are determined by the severity of the breach and are subject to the general penalties outlined in the Customs Act.