EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0917506
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.
Amity Pacific applied for a TCO in respect of certain cold rolled alloy steel sheet or plate on 25 May 2009.
Instrument
TCO No 0917506 was made on 14 August 2009. It declares that those certain cold rolled alloy steel sheet or plate 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. 0917506 is taken to have come into force on 25 May 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, enacted by the Parliament of Australia, introduces a scheme whereby Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO) to apply lower rates of customs duty to specific goods. This scheme aims to address the gap in providing tariff relief for imported goods where no substitutable goods are produced in Australia. The policy objective is to ensure that such tariff concessions are available when it is in the public interest and no domestic production of equivalent goods exists. The explanatory statement outlines that Amity Pacific applied for a TCO for certain cold rolled alloy steel sheets or plates, which was granted as no substitutable goods were produced in Australia, leading to a duty rate of zero for these goods. The TCO was published in the Gazette, with no submissions received against it, and it came into force on the date of application. This legislative instrument ensures that the rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the effective date of the TCO.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the process through which Tariff Concession Orders (TCOs) are granted by the Chief Executive Officer of Customs (CEO) to provide reduced customs duties on certain goods. Any person may apply to the CEO for a TCO in relation to goods, provided the goods are not those specified in section 269SJ of the Act which are ineligible for tariff concessions. For an application to be considered, it must meet the core criteria stipulated in section 269C, namely that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. The definitions of key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively. If the CEO is satisfied that the application meets these criteria, they are required to issue a written order declaring that the specified goods are subject to a prescribed tariff item. The application process includes a requirement for the CEO to publish a notice in the Gazette inviting submissions from any interested parties, although no such submissions were received in this case. The TCO, once made, applies retroactively to the date of the application, benefiting importers by allowing them to seek refunds of duty paid on goods imported since that date without imposing any liabilities on any person other than the Commonwealth.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0917506, under the Customs Act 1901, relate to the process and criteria for establishing a Tariff Concession Order (TCO). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of certain goods. Section 269C specifies that the application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P(3) mandates that if the CEO is satisfied with the application, they must make a written order (TCO) declaring the specified goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. Instrument TCO No. 0917506, made on 14 August 2009, declared that certain cold rolled alloy steel sheet or plate are subject to a TCO, with a general duty rate of 5% reduced to free under the TCO.
The Act imposes specific obligations and requirements on the parties involved in the TCO process. The CEO must review any TCO application to ensure it meets the core criteria as outlined in section 269C. If satisfied, the CEO must make a written TCO order as stipulated in section 269P(3). Additionally, the CEO is required to publish a notice in the Gazette under subsection 269K(1), inviting submissions from any person who might have reasons against the TCO. If no submissions are received, the CEO proceeds to issue the TCO. The TCO itself does not affect existing rights or impose liabilities on any person other than the Commonwealth, ensuring that it does not disadvantage anyone who acted before the TCO came into effect.
In terms of breaches and consequences, the Act does not explicitly state penalties for failing to comply with the provisions of a TCO. However, general provisions under the Customs Act 1901 apply, where breaches can result in both civil and criminal penalties. Civil penalties may include fines and pecuniary penalties, while criminal penalties can include imprisonment, depending on the nature and severity of the breach. The maximum penalties are not specified in the explanatory statement but would be governed by the broader legislative framework of the Customs Act and associated regulations.
Overall, Tariff Concession Instrument No. 0917506 provides a streamlined process for reducing customs duty on specific goods, provided they meet the criteria outlined in the Customs Act 1901. The Act ensures that the TCO process is transparent, with publication in the Gazette allowing for public input, and that it does not retroactively affect existing rights or impose liabilities. Any breaches of the TCO provisions may lead to significant penalties, reinforcing the importance of compliance with the Act’s requirements.