EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0912184
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.
Visy Industries applied for a TCO in respect of certain flat rolled steel on 09 April 2009.
Instrument
TCO No 0912184 was made on 03 July 2009. It declares that those certain flat rolled 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. 0912184 is taken to have come into force on 09 April 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 Customs Act 1901, as amended, introduced a scheme to facilitate the reduction of customs duties on certain goods through Tariff Concession Orders (TCOs). Enacted by the Parliament of Australia, the Act provides a mechanism for the Chief Executive Officer of Customs to apply lower rates of customs duty on goods subject to a TCO, provided certain criteria are met. The policy objective of this legislative instrument is to encourage the importation of goods that are not domestically produced, thereby supporting industry competitiveness and potentially lowering costs for consumers. This particular Tariff Concession Order, TCO No. 0912184, was issued on 3 July 2009, in response to an application by Visy Industries for a concession on certain flat rolled steel products. The CEO determined that no substitutable goods were produced in Australia, leading to the application of a free rate of duty on these specific goods, which otherwise carry a general duty rate of 5%. The TCO came into effect on 9 April 2009, the date the application was lodged, and no submissions were received in opposition to the concession.
Scope and Application
The Tariff Concession Instrument No. 0912184 under the Customs Act 1901 applies specifically to goods for which a Tariff Concession Order (TCO) has been applied and subsequently granted by the Chief Executive Officer of Customs (CEO). This legislation allows for a lower rate of customs duty to be applied to certain goods, provided they meet specific criteria such as not having substitutable goods produced in Australia in the ordinary course of business. The application of this legislation is directly tied to the provisions of the Customs Act 1901 and the Customs Tariff Act 1995. It applies to entities or individuals who are importing goods that are subject to a TCO, thereby reducing their customs duty obligations. The scope of this legislation is national, as it operates under the authority of Commonwealth law, impacting importers across Australia. Notably, the legislation excludes goods specified in section 269SJ of the Customs Act 1901, which are ineligible for tariff concessions. The CEO’s decision to grant a TCO is pivotal and can be influenced by subordinate instruments, although no such instruments are detailed in the provided text.
Key Provisions
The main operative sections of the Customs Act 1901, particularly those related to Tariff Concession Orders (TCOs), establish the framework for the CEO to grant concessions on customs duty. Section 269F allows an individual to apply to the CEO for a TCO concerning specific goods. If the CEO determines that the application complies with the core criteria, they must issue a written order (a TCO) that specifies the reduced duty rate for the goods (section 269P(3)). The CEO must ensure that no substitutable goods are produced in Australia on the date of the application (section 269C). This process is governed by the definitions in sections 269D, 269E, and 269F, which clarify what constitutes goods produced in Australia, ordinary course of business, and substitutable goods, respectively.
The Act imposes several obligations on the parties involved. The CEO must assess the validity of TCO applications and ensure that the goods in question meet the core criteria outlined in the Act. If the application is deemed valid, the CEO must issue a TCO, specifying the new duty rate for the goods. Additionally, the CEO is required to publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be made (subsection 269K(1)).
Breach of the provisions set forth in the Customs Act 1901 may lead to various consequences. While specific offences and penalties are not detailed in the explanatory statement, it is reasonable to infer that non-compliance with the Act's requirements could result in civil or criminal penalties. These penalties may include fines or other sanctions as prescribed by relevant Australian laws. For example, providing false information in a TCO application could lead to criminal charges under sections such as 308 of the Criminal Code Act 1995, which carries a maximum penalty of two years imprisonment. Similarly, failing to adhere to the duty payment requirements could result in civil penalties under the Customs Act 1901 itself, which may include fines and interest on unpaid duties.