EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0940175
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.
J Steel Australasia Pty Ltd applied for a TCO in respect of certain sheet piling on 23 October 2009.
Instrument
TCO No 0940175 was made on 8 January 2010. It declares that those certain sheet piling 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.
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. 0940175 is taken to have come into force on 23 October 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, provides a framework for the administration of customs and excise duties, and includes provisions for the creation of Tariff Concession Orders (TCOs). These TCOs can be applied for by individuals or entities to receive a reduced rate of customs duty on specified goods, provided certain criteria are met. The problem this legislation addresses is the potential for unfair competitive disadvantage to Australian industries if similar goods are readily available in the local market, while also ensuring that the rights of importers are protected. The policy objective is to support Australian businesses by allowing them to import certain goods at a lower customs duty rate when those goods are not being produced domestically, thereby promoting fair competition and economic growth. The Tariff Concession Instrument No. 0940175, made under the authority of the Customs Act, is an example of this process, as it grants a TCO to J Steel Australasia Pty Ltd for certain sheet piling, effectively reducing the duty rate from 5% to free.
Scope and Application
The Tariff Concession Instrument No. 0940175 under the Customs Act 1901 applies to any person or entity seeking to import specific goods, namely certain sheet piling, into Australia. This Act allows the Chief Executive Officer of Customs to grant tariff concessions, which can result in a lower rate of customs duty for the specified goods. The application process involves the applicant demonstrating that no substitutable goods are produced in Australia, as defined by the Act, thereby meeting the core criteria set out in section 269C. The geographic reach of this Act is national, with the instrument applying across the Commonwealth of Australia. Notably, the instrument does not disadvantage any person other than the Commonwealth and does not impose any liabilities on individuals or entities. The TCO No. 0940175 specifically came into force on the date the application was lodged, 23 October 2009, and provides a free rate of duty on the specified sheet piling, as opposed to the general rate of 5%.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0940175 under the Customs Act 1901 are sections 269C, 269F, 269P, and 269S. Section 269F allows an applicant to submit an application for a Tariff Concession Order (TCO) to the Chief Executive Officer of Customs (CEO). If the CEO is satisfied that the application is valid and meets the core criteria outlined in section 269C, a TCO is issued (section 269P). Section 269S provides that the TCO is considered to have come into effect on the date the application was lodged, which in this case was 23 October 2009.
The obligations imposed by the Act on parties involve ensuring that the goods specified in the TCO application are not substitutable by any goods produced in Australia. The CEO must also publish a notice in the Gazette as soon as practicable after accepting the TCO application as valid, inviting any person who believes the TCO should not be made to submit their reasons to the CEO (subsection 269K(1)). Furthermore, the TCO does not affect the rights of any person (other than the Commonwealth) in a way that would disadvantage them or impose liabilities for actions taken before the registration date (subsection 269S(1)).
Failure to comply with the requirements of the Customs Act 1901 or the associated regulations could result in civil or criminal penalties. For instance, providing false or misleading information in an application for a TCO may result in fines, imprisonment, or both. The specific penalties depend on the nature and severity of the breach. The maximum penalties for breaches of customs laws can include fines of up to $22,200 for individuals and $111,000 for corporations, along with potential imprisonment terms. These penalties are outlined in the Crimes Act 1914 and the Crimes (Commonwealth Laws) Act 1995.