EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0943744
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 aluminium silicon alloy coated steel sheet on 19 November 2009.
Instrument
TCO No 0943744 was made on 05 February 2010. It declares that those certain aluminium silicon alloy coated steel sheet 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. 0943744 is taken to have come into force on 19 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 Tariff Concession Instrument No. 0943744 was enacted in 2010 under the Customs Act 1901 to provide a concession in customs duty rates for specific goods, addressing the need for tariff adjustments to support industry and economic activities. This instrument was introduced by the Chief Executive Officer of Customs (CEO) following an application by Amity Pacific for tariff concessions on certain aluminium silicon alloy coated steel sheet, which are subject to a lower duty rate under the scheme established by Part XVA of the Act. The CEO determined that no substitutable goods were being produced in Australia, satisfying the core criteria for tariff concession, as outlined in section 269C of the Act. The instrument provides a free rate of duty for these goods, which contrasts with the general rate of 5%, and is effective from the date of application, 19 November 2009. The process adheres to the requirements of subsection 269K(1) of the Act, which mandates public consultation, although no submissions were received in this instance. The tariff concession does not affect any pre-existing rights or impose new liabilities, thereby ensuring that only the rights of importers are beneficially impacted, allowing for duty refunds as per the Regulations.
Scope and Application
The Customs Act 1901, through its Tariff Concession Instrument No. 0943744, applies to the application process for Tariff Concession Orders (TCOs) by granting reduced customs duty rates on specific goods under certain conditions. This legislation primarily concerns entities and individuals engaged in the import of goods, specifically those seeking tariff concessions for aluminium silicon alloy coated steel sheet, as exemplified by the case of Amity Pacific. The scope of the Act extends to the entire Commonwealth of Australia, with its provisions enforceable nationally. The Act's application is governed by the core criteria outlined in sections 269C, 269D, and 269E, which stipulate that a TCO can only be granted if no substitutable goods are produced in Australia. Furthermore, the Act excludes goods specified in section 269SJ from TCO consideration. The instrument allows for further specification and application of the Act's provisions through subordinate instruments, ensuring flexibility and precision in its implementation.
Key Provisions
The Customs Act 1901, as amended, contains provisions allowing for the creation of Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs (CEO) can apply reduced rates of customs duty on specified goods (section 269F). To qualify, an application must meet core criteria outlined in section 269C, which requires that, on the date of application, no substitutable goods are produced in Australia in the ordinary course of business. The definitions of key terms such as "substitutable goods," "goods produced in Australia," and "ordinary course of business" are provided in sections 269D, 269E, and 269F respectively. If the CEO is satisfied that these criteria are met, a written TCO must be issued (section 269P(3)).
Entities applying for a TCO must ensure their applications comply with the requirements set out in the Act. This includes demonstrating that no substitutable goods are produced in Australia, as per section 269C. The CEO is mandated to publish a notice in the Gazette inviting submissions from any interested parties who may have reasons why the TCO should not be granted (subsection 269K(1)). If no submissions are received, the CEO proceeds to make the TCO, as occurred in the case of Amity Pacific’s application for a TCO on certain aluminium silicon alloy coated steel sheets (TCO No. 0943744). This TCO was made on 5 February 2010 and specifies that the goods are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with a duty rate of free instead of the general 5% rate.
The TCO does not affect any pre-existing rights or liabilities of persons other than the Commonwealth. Importantly, it allows for the rights of importers to be beneficially affected, including the ability to apply for a refund of duty on goods imported since the TCO came into effect on 19 November 2009 (paragraph 126(1)(r) of the Regulations). Importantly, the TCO does not impose any new liabilities on any person.
Failure to comply with the requirements set out in the Customs Act 1901 and the associated regulations could lead to various civil and criminal consequences. While specific penalties for breaches are not detailed in the explanatory statement, general provisions under the Customs Act may apply. These could include fines and imprisonment for more severe infractions, reflecting the seriousness of non-compliance with customs regulations. The exact penalties would depend on the nature and severity of the breach, as defined under the broader customs legislative framework.