EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0943669
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.
BAE Systems Australia Defence applied for a TCO in respect of certain high alloy steel plates or sheets on 18 November 2009.
Instrument
TCO No 0943669 was made on 19 March 2010. It declares that those certain high alloy steel plates or sheets 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. 0943669 is taken to have come into force on 18 November 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 was enacted by the Australian Parliament to provide for the regulation of customs and excise duties, among other things. Part XVA of this Act establishes a scheme under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders allow for lower rates of customs duty on specified goods, provided that certain core criteria are met. The problem or gap that this scheme addresses is the need to provide tariff relief for imported goods where no suitable Australian-produced substitutes exist. This helps to ensure fair trade practices and supports the competitive position of Australian businesses. The Tariff Concession Instrument No. 0943669, which was published on 19 March 2010, is an example of such an order, providing duty-free status to certain high alloy steel plates or sheets from 18 November 2009. This measure was implemented to support BAE Systems Australia Defence's application for tariff concessions, ensuring the availability of critical materials for their operations.
Scope and Application
The Tariff Concession Instrument No. 0943669, under the Customs Act 1901, applies to certain high alloy steel plates or sheets that BAE Systems Australia Defence sought a tariff concession for. The application was approved by the Chief Executive Officer of Customs, resulting in a concession that exempts these specific goods from the usual customs duty of 5%, setting the duty rate at free instead. This concession is contingent upon the CEO's determination that no substitutable goods are produced in Australia in the ordinary course of business, a requirement established under section 269C of the Act. The scope of the concession is limited to the goods specified in the application, and it does not affect any existing rights of individuals or entities as of the date of application. The concession came into force on 18 November 2009, the date the application was lodged, and it applies nationally within Australia. No exclusions, exemptions, or thresholds are specified beyond the conditions outlined in the Act. The CEO is mandated to publish a notice in the Gazette inviting submissions from any interested parties, although no submissions were received for this particular concession.
Key Provisions
The Customs Act 1901, particularly Part XVA, outlines a scheme where the Chief Executive Officer of Customs (CEO) can issue Tariff Concession Orders (TCOs) that apply a lower rate of customs duty to specified goods. Section 269F allows an individual or entity to apply for a TCO. If the application pertains to goods not listed in section 269SJ, which specifies goods ineligible for TCOs, the CEO must assess if the application meets the core criteria (section 269C). For an application to meet these criteria, on the date of submission, no substitutable goods must be produced in Australia in the ordinary course of business, as defined in sections 269D and 269E of the Act. If the CEO confirms the application meets the core criteria, they are mandated by section 269P(3) to issue a written TCO, declaring the goods to which a specified item of Schedule 4 to the Customs Tariff Act 1995 applies, effectively reducing the customs duty rate.
The CEO has obligations under this Act to ensure that TCO applications are processed efficiently and transparently. Under subsection 269K(1), as soon as practicable after accepting a TCO application, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections or feedback regarding the application. In the case of TCO No. 0943669, no submissions were received in response to this invitation, indicating a lack of opposition to the concession. The TCO's effective date, as stipulated in subsection 269S(1), is the date the application was lodged, which for TCO No. 0943669 was 18 November 2009. This TCO provides significant benefits to importers of the specified high alloy steel plates or sheets by allowing them to apply for a refund of duty on goods imported since the TCO came into force.
Failure to comply with the requirements of the Customs Act 1901 and the associated regulations could result in various penalties. Under section 248 of the Act, the Commissioner of Customs can impose administrative penalties for non-compliance, including fines up to the statutory maximum of $22,200 for individuals and $111,000 for corporations, depending on the severity of the breach. Additionally, section 249 of the Act outlines criminal penalties for serious offences, such as knowingly making a false or misleading statement, which can result in imprisonment for up to five years, or both imprisonment and fines. The Act also includes provisions for civil penalties and the recovery of duties and taxes where non-compliance occurs, ensuring that all parties adhere to the legislative requirements and obligations.