EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0944971
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 tin free steel on 26 November 2009.
Instrument
TCO No 0944971 was made on 26 February 2010. It declares that those certain tin free 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. 0944971 is taken to have come into force on 26 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, enacted by the Australian Parliament, establishes a framework for the imposition of customs duty on imported goods. One of its provisions, specifically Part XVA, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders can lower the rate of customs duty for certain goods if the application meets specific criteria, primarily that no substitutable goods are produced in Australia. The purpose of this legislative instrument is to provide relief to industries by reducing the cost of imported goods that do not have domestic alternatives, thereby supporting competitive markets and potentially fostering industry growth. The introduction of TCOs aims to bridge the gap for businesses that rely on imported materials that cannot be substituted with locally produced alternatives, ensuring they remain competitive in their respective markets.
Scope and Application
The Customs Act 1901, under Part XVA, facilitates the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This mechanism allows for a lower rate of customs duty on specific goods, provided certain criteria are met. The process involves an application by a person or entity to the CEO, who must then determine if the application meets the core criteria, particularly if no substitutable goods are produced in Australia in the ordinary course of business. If the application satisfies these criteria, the CEO must issue a written TCO, effectively applying a reduced duty rate to the specified goods. This legislation applies to any person or entity seeking to import goods that can benefit from tariff concessions, provided they comply with the stipulations set out in the Customs Act 1901 and the Customs Tariff Act 1995. The TCO does not affect existing rights or impose liabilities on any person other than the Commonwealth, and it is applicable from the date the application was lodged.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0944971, as referenced in the Explanatory Statement, pertain to the establishment of tariff concession orders (TCOs) under the Customs Act 1901 (section 269F). Specifically, section 269C sets the criteria for a TCO application to be considered valid, which is determined by the Chief Executive Officer of Customs (CEO) based on whether there are no substitutable goods produced in Australia at the time of the application (section 269D and 269E). If these criteria are met, the CEO is required to issue a written TCO (section 269P(3)). In this case, the CEO granted a TCO for certain tin free steel, reducing the duty rate from 5% to free (item 50 of Schedule 4 to the Customs Tariff Act 1995).
The obligations imposed by the Act on the parties involved include the requirement for an applicant, such as Visy Industries, to submit an application to the CEO for a TCO (section 269F). The CEO must then assess the application against the core criteria (section 269C) and ensure that the goods do not fall under the exclusions specified in section 269SJ. Additionally, the CEO is mandated to publish a notice in the Gazette inviting submissions from interested parties (subsection 269K(1)), though in this instance, no submissions were received. The Act also stipulates that the TCO must be effective from the date the application was lodged (subsection 269S(1)).
The Explanatory Statement outlines the potential consequences for non-compliance with the provisions of the Customs Act 1901. While the specific offences and penalties are not detailed in the context of the TCO, general provisions within the Act could include fines or imprisonment for contravening the customs laws. The Act aims to ensure that the rights of importers are protected and that no new liabilities are imposed on any person as a result of the TCO. The refund provisions under paragraph 126(1)(r) of the Regulations allow importers to seek duty refunds for goods imported since the TCO's effective date.