EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1124118
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.
Milltech Martin Bright applied for a TCO in respect of certain steel bars on 20 July 2011.
Instrument
TCO No 1124118 was made on 19 October 2011. It declares that those certain steel bars 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. 1124118 is taken to have come into force on 20 July 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, establishes a framework for the regulation of customs duties and provides for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. The 2012 Tariff Concession Instrument No. 1124118 was introduced to address a specific application by Milltech Martin Bright for tariff concessions on certain steel bars, with the aim of providing a lower rate of customs duty on these goods. The instrument was made under the authority of the Customs Act 1901, with the objective of facilitating trade by reducing the duty burden on goods for which no substitutable Australian-produced goods exist. The instrument became effective from the date the application was lodged, ensuring that importers could benefit from duty-free imports of these specific steel bars without incurring any additional liabilities.
Scope and Application
The Tariff Concession Instrument No. 1124118, made under the Customs Act 1901, applies to the concession of tariff rates on certain steel bars as specified by Milltech Martin Bright. The legislation is relevant to entities or individuals importing these particular steel bars, aiming to reduce the customs duty imposed on these goods. The scope of this Act is national, as it is governed by the Commonwealth. The application is limited to goods specified in the instrument, ensuring that only the designated steel bars benefit from the tariff concession. Exclusions under section 269SJ of the Act ensure that certain goods, which are not eligible for tariff concessions, remain unaffected. The Act extends its application through subordinate instruments, such as the Customs Tariff Act 1995, which provides the prescribed tariff rates. The commencement of this specific tariff concession is effective from 20 July 2011, the date the application was lodged, and it does not retroactively affect any pre-existing rights or liabilities.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 1124118 (F2012L00137) pertain to the granting of a Tariff Concession Order (TCO) under section 269F of the Customs Act 1901 (the Act). Specifically, this instrument was made following an application by Milltech Martin Bright on 20 July 2011, for a TCO in respect of certain steel bars. If the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria, which include the absence of substitutable goods produced in Australia on the date of the application (section 269C), the CEO is required to make a written order (section 269P(3)). This order, known as a TCO, effectively declares the goods to which a specific item of Schedule 4 of the Customs Tariff Act 1995 applies. In this case, the CEO was satisfied that no substitutable goods were produced in Australia, and thus declared that the certain steel bars are goods to which item 50 of Schedule 4 applies, resulting in a duty rate of free, as opposed to the general rate of 5%.
The Act imposes several obligations on the parties involved in the TCO process. Firstly, any person can apply to the CEO for a TCO if the goods in question are not specified in section 269SJ of the Act, which excludes certain goods from being subject to a TCO. The CEO must then determine if the application meets the core criteria, which requires ensuring that no substitutable goods were produced in Australia on the day the application was lodged. Additionally, as soon as practicable after accepting a TCO application as valid, the CEO must publish a notice in the Gazette inviting any interested parties to submit their views on whether the TCO should be made. The CEO must also consider any submissions received before making a decision on the application.
There are no specific offences outlined in the explanatory statement for breach of the Act in the context of TCOs. However, the consequences of non-compliance with the conditions set forth by the Act or the TCO itself could lead to civil or criminal liabilities. The explanatory statement does not detail specific penalties, but typically, breaches of the Customs Act 1901 could result in fines or other penalties as determined by the courts. The Act ensures that the rights of persons, other than the Commonwealth, are not adversely affected by the TCO, and no new liabilities are imposed on anyone as a result of the TCO.