EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1037311
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.
Onesteel Trading applied for a TCO in respect of certain steel casings on 13 August 2010.
Instrument
TCO No 1037311 was made on 08 November 2010. It declares that those certain steel casings 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. 1037311 is taken to have come into force on 13 August 2010.
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, provides a framework for the administration of customs duties and tariffs, among other things. The Act was introduced to address the need for a streamlined process to manage tariff concessions for specific goods, ensuring that Australian industries can compete effectively in the global market. The Tariff Concession Instrument No. 1037311 was introduced to facilitate the application of tariff concessions for certain steel casings, allowing Onesteel Trading to apply for a lower rate of customs duty. This was enacted to ensure that these goods are not subject to a higher tariff rate, thereby supporting the domestic industry and potentially reducing costs for businesses importing these goods. The policy objective here is to provide economic benefits by lowering the cost of imported goods, which in turn can help maintain competitive pricing and support industry growth.
Scope and Application
The Customs Act 1901, under Part XVA, provides for the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This legislation applies to entities or individuals who seek tariff concessions on specific goods, provided that such goods are not listed in section 269SJ of the Act, which prohibits certain goods from being subject to TCOs. The Act applies to the entire Commonwealth of Australia and extends to any goods that meet the criteria specified therein. The CEO's decision to grant a TCO hinges on the core criteria, namely that no substitutable goods are produced in Australia in the ordinary course of business at the time of application. This is as defined by sections 269C, 269D, 269E, and 269F of the Act. The TCO applies retroactively to the date the application was lodged, offering no disadvantage to any party and imposing no new liabilities. The CEO must publish a notice in the Gazette inviting public submissions on the TCO application, although no submissions were received in this instance. The TCO, once registered, confers tariff benefits to importers who can apply for refunds of duties paid on the specified goods.
Key Provisions
The Tariff Concession Order (TCO) No 1037311, as outlined in the explanatory statement, pertains to a specific category of steel casings. The primary operative section of this legislation is Section 269F of the Customs Act 1901, which allows for the application of a TCO by a person, in this case Onesteel Trading, to the Chief Executive Officer (CEO) of Customs. If the CEO is satisfied that the application is valid and the goods in question are not excluded under Section 269SJ, the CEO must assess whether the application meets the core criteria specified in Sections 269C, 269B, and 269D. These sections define the conditions under which a TCO can be granted, specifically if no substitutable goods are produced in Australia in the ordinary course of business.
The obligations imposed on the parties involved under this Act are primarily centred around the application process and the assessment criteria. The CEO is mandated to publish a notice in the Gazette inviting submissions from any interested parties regarding the proposed TCO. This notice was published for TCO No 1037311 as soon as practicable after the application was accepted as valid. The CEO's role also includes determining whether the application meets the criteria for a TCO, which involves verifying that no substitutable goods are produced in Australia. The applicant, in this instance Onesteel Trading, must provide all necessary information and evidence to support their application.
In terms of legal consequences for breach, the Customs Act 1901 does not explicitly outline specific offences, penalties, or civil/criminal consequences for non-compliance with the TCO provisions. However, any breaches of related customs regulations could lead to penalties as outlined under the Customs Act 1901 and the Customs Regulations 1993. For instance, misleading or incorrect information provided in a TCO application could potentially lead to administrative penalties, fines, or other enforcement actions by the CEO. It is important to note that the TCO itself does not impose any liabilities on any person, ensuring that the rights of individuals, excluding the Commonwealth, are not adversely affected by its implementation.