EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1104052
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.
Propex Concrete Systems Aust applied for a TCO in respect of certain steel wire fibres on 27 January 2011.
Instrument
TCO No 1104052 was made on 18 April 2011. It declares that those certain steel wire fibres 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. 1104052 is taken to have come into force on 27 January 2011.
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 Commonwealth Parliament, provides a framework under which Tariff Concession Orders (TCOs) can be issued to apply lower rates of customs duty on specific goods. The Act was introduced to address the need for a streamlined process to reduce customs duty on goods where Australian-made alternatives do not exist or are not economically viable. The Explanatory Statement for Tariff Concession Instrument No. 1104052 clarifies the procedure under which TCOs are made, specifically addressing the application made by Propex Concrete Systems Aust for certain steel wire fibres. The instrument was issued on 18 April 2011 after the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, thereby satisfying the core criteria. This decision resulted in the specified steel wire fibres being subject to a zero rate of duty, down from the general rate of 5%. The policy objective is to facilitate the importation of goods that are not produced locally, thereby potentially lowering costs for businesses and consumers while ensuring that the rights of existing importers are preserved without any additional liabilities imposed.
Scope and Application
The Customs Act 1901, as supplemented by Tariff Concession Instrument No. 1104052, pertains to the application and implementation of Tariff Concession Orders (TCOs) for specific goods. This legislation applies to any person or entity seeking a concession on the customs duty for imported goods, provided these goods do not fall under the category of those specified in section 269SJ of the Act, which are ineligible for a TCO. The instrument specifically addresses steel wire fibres, which are subject to a concession that reduces their customs duty from the general rate of 5% to free. This Act operates on a Commonwealth level, with the Chief Executive Officer of Customs responsible for processing and approving TCO applications. The geographic reach of this legislation is national, as it applies to all imports into Australia. The TCO itself does not impose any new liabilities or disadvantage any person other than the Commonwealth, and it does not affect rights as they stood on the date of the application. Subordinate instruments may extend or further define the application of this Act, thereby providing additional clarity or conditions under which the concessions are granted.
Key Provisions
The Tariff Concession Instrument No. 1104052 under the Customs Act 1901 (section 269F) pertains to a Tariff Concession Order (TCO) that applies to certain steel wire fibres. According to section 269C, a TCO is granted if the Chief Executive Officer (CEO) of Customs determines that no substitutable goods were produced in Australia on the date the application was lodged, and the goods in question are not specified in section 269SJ of the Act. This assessment ensures that the concession does not undermine domestic production of similar goods. If the CEO is satisfied that the application meets the core criteria, a written order is issued under section 269P(3) of the Act, declaring that the goods are subject to a specified rate of customs duty, in this case, free of charge instead of the general rate of 5%.
The Act imposes specific obligations on both the applicant and the CEO. For the applicant, the primary obligation is to submit a valid application under section 269F, ensuring that the goods meet the criteria for a TCO as outlined in section 269C. The CEO, on the other hand, is obligated to evaluate the application against these criteria and to make a decision based on whether the goods are substitutable and produced in Australia. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting any interested party to submit objections or reasons why the TCO should not be made. In this case, no submissions were received.
Failure to comply with the provisions of the Customs Act 1901 regarding the application and issuance of TCOs may result in various legal consequences. While the explanatory statement does not explicitly detail penalties for non-compliance, breaches of the Act can generally lead to enforcement actions, including fines and potential criminal charges. The maximum penalties for breaches of the Customs Act can be significant, often involving substantial fines and imprisonment, depending on the severity and intent of the violation. These penalties serve to uphold the integrity of the customs duty system and ensure compliance with the legislative framework.