EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1105008
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.
King Springworks Pty Ltd applied for a TCO in respect of certain alloy steel hot rolled coils on 04 February 0211.
Instrument
TCO No 1105008 was made on 02 May 2011. It declares that those certain alloy steel hot rolled coils 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. 1105008 is taken to have come into force on 04 February 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 Australian Parliament, provides a framework for the regulation of customs and excise through various mechanisms, including the establishment of tariff concession orders (TCOs). The Act was introduced to streamline and modernise Australia's customs and excise systems, ensuring efficient trade and accurate duty collection. The Tariff Concession Instrument No. 1105008, made under the Customs Act 1901, addresses the specific issue of providing tariff concessions for certain imported goods, in this case alloy steel hot rolled coils, by reducing or eliminating customs duty on these goods. The instrument was enacted to facilitate the import of these goods, which are not produced domestically, thereby supporting industries that rely on such imports and encouraging fair trade practices.
Scope and Application
The Tariff Concession Instrument No. 1105008 under the Customs Act 1901 applies specifically to certain alloy steel hot rolled coils for which King Springworks Pty Ltd applied for a tariff concession order (TCO). The Act provides a framework where the Chief Executive Officer of Customs can grant TCOs that lower the customs duty on particular goods, provided they meet certain criteria, such as the absence of substitutable goods produced in Australia. This legislative instrument is effective at the Commonwealth level and applies nationally. It is pertinent to note that the TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person. The rights of importers are beneficially affected as they can apply for a refund of duty on the goods imported since the TCO came into force. Any exclusions or exemptions from the TCO are strictly defined within the Act and its associated regulations, ensuring the application remains targeted and compliant with the legislative intent.
Key Provisions
The main sections of the Tariff Concession Instrument No. 1105008, under the Customs Act 1901, establish the framework for the application and issuance of Tariff Concession Orders (TCOs) for specific goods, in this case, certain alloy steel hot rolled coils. Section 269F allows an application to be made to the Chief Executive Officer (CEO) of Customs for a TCO if the goods are not prohibited under section 269SJ. The CEO must then assess whether the application meets the core criteria, which include the absence of substitutable goods produced in Australia as outlined in sections 269C, 269B, 269D and 269E. If these criteria are met, the CEO is required to issue a written order as per section 269P(3).
The Act imposes specific obligations on both the applicant and the CEO. For the applicant, the obligation is to submit an application for a TCO, ensuring that it complies with the requirements of sections 269F and 269SJ. The CEO’s obligations include accepting the application, verifying that it meets the core criteria, and if satisfied, issuing the TCO. Moreover, the CEO must publish a notice in the Gazette under subsection 269K(1), inviting any interested parties to submit objections to the TCO. In this instance, no submissions were received.
In the event of non-compliance with the conditions set out in the TCO, there are potential consequences. Although the explanatory statement does not specify offences or penalties for breach of a TCO, under the general provisions of the Customs Act 1901, breaches of customs regulations can lead to both civil and criminal penalties. Civil penalties may include fines, while criminal penalties can include imprisonment, reflecting the seriousness with which the Australian government treats violations of customs laws. The specific penalties would depend on the nature and severity of the breach.