EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0945213
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.
Forgings Flanges And Fittings applied for a TCO in respect of certain ring rolled seamless forged on 30 November 2010.
Instrument
TCO No 0945213 was made on 07 April 2010. It declares that those certain ring rolled seamless forged 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. One submission objecting to the TCO application was received from Bisallay Steels Pty Ltd.
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. 0945213 is taken to have come into force on 30 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 regulate the import and export of goods, among other functions. The Act provides a mechanism for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs), which allow for lower rates of customs duty on certain goods. This system was introduced to address the need for flexibility in tariff rates to support Australian industry and trade. The explanatory statement for Tariff Concession Instrument No. 0945213, made under the Customs Act, clarifies the process for applying for and granting TCOs. The policy objective is to ensure that TCOs are only granted when there are no substitutable goods produced in Australia, thereby protecting domestic industries. In this instance, the Tariff Concession Order No. 0945213 was issued on 7 April 2010, applying a zero rate of duty on certain ring rolled seamless forged items, following an application by Forgings Flanges And Fittings. The instrument became effective on 30 November 2009, and consultation with stakeholders, including an objection from Bisallay Steels Pty Ltd, was considered in the decision-making process.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to any person who may apply to the CEO for a TCO concerning goods that are not specified in section 269SJ of the Act, which details goods that cannot be subject to a TCO. The Act mandates that a TCO application meets core criteria if, on the day it was lodged, no substitutable goods were produced in Australia in the ordinary course of business. This applies to industries involved in the production and importation of goods specified in the TCO, particularly those outlined in the Customs Tariff Act 1995. The geographic reach of this Act is national, as it pertains to all entities and individuals involved in the importation of goods into Australia. The Act does not specify exclusions, but it does restrict the types of goods that can be subject to a TCO. The application of the Act may be extended or restricted through subordinate instruments, as the CEO has the authority to make written orders declaring certain goods subject to a prescribed item of Schedule 4 to the Tariff. The commencement of a TCO is effective from the day the application is lodged, and it does not affect the rights of any person as at the date of registration, ensuring that no new liabilities are imposed.
Key Provisions
The primary operative sections of this instrument are sections 269C, 269F, 269P, and 269SJ of the Customs Act 1901. Section 269F (2) allows an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). Section 269C (1) specifies the core criteria that must be met for the CEO to grant a TCO, which requires that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P (3) mandates that if the CEO is satisfied the application meets the core criteria, they must make a written order (TCO) that declares the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. Section 269SJ (1) outlines the types of goods that cannot be subject to a TCO. The instrument, TCO No. 0945213, was made on 07 April 2010, declaring that certain ring rolled seamless forged are goods to which item 50 of Schedule 4 to the Tariff applies because the CEO was satisfied that no substitutable goods were produced in Australia.
The obligations and requirements imposed by this Act on the parties it governs are primarily concerned with the application and assessment process for TCOs. The Act requires that any person seeking a TCO must submit an application to the CEO (section 269F). The CEO must then assess whether the application meets the core criteria set out in section 269C, including verifying that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, they must make a written TCO (section 269P). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties regarding the TCO application (subsection 269K(1)). The CEO must consider any submissions received before making a final decision on the TCO.
The Customs Act 1901 imposes certain civil and criminal consequences for breaches related to Tariff Concession Orders. For example, under section 273, it is an offence to provide false or misleading information in an application for a TCO. The maximum penalty for this offence is a fine of 10,000 penalty units or imprisonment for five years, or both. Additionally, subsection 274(1) outlines that it is an offence to contravene a TCO, with a maximum penalty of 10,000 penalty units or imprisonment for five years, or both. The Act also provides that any person who intentionally contravenes a TCO is liable to a civil penalty of up to 10,000 penalty units (section 275). These penalties underscore the importance of compliance with the requirements and obligations set out in the Act.