EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0605222
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.
Omega Steel and Alloy Pty Ltd applied for a TCO in respect of certain aluminium alloy tubes on 14 March 2006.
Instrument
TCO No 0605222 was made on 9 June 2006. It declares that those certain aluminium alloy tubes 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. 0605222 is taken to have come into force on 14 March 2006.
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 Tariff Concession Instrument No. 0605222, enacted in 2006, is a legislative instrument under the Customs Act 1901, designed to facilitate tariff concessions for specific goods by reducing or eliminating customs duty. This instrument was introduced to address the need for tariff concessions to encourage the importation of goods that are not produced domestically, thereby promoting competition and consumer choice. The instrument was enacted by the Australian Government, specifically through the Chief Executive Officer of Customs, who has the authority under the Customs Act to make Tariff Concession Orders. The policy objective of this legislation is to ensure that tariff concessions are granted in a manner that supports the broader economic interests by avoiding the disadvantage to domestic producers of substitutable goods.
The process involves an application to the CEO, who must determine whether the application meets the core criteria set out in the Act, primarily ensuring that no substitutable goods are produced in Australia. In the case of Omega Steel and Alloy Pty Ltd’s application for certain aluminium alloy tubes, the CEO concluded that no such domestic production existed, leading to the issuance of TCO No. 0605222, which granted a tariff concession effective from the date the application was lodged. This approach ensures that the rights of importers are protected and potentially enhanced, while also safeguarding against any retrospective disadvantages to those who have already imported the goods under the new tariff conditions.
Scope and Application
The Tariff Concession Instrument No. 0605222 applies to specific goods, namely certain aluminium alloy tubes, and is administered under the Customs Act 1901. This legislation allows for the reduction of customs duties on certain imported goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. The instrument was applied in the case of Omega Steel and Alloy Pty Ltd, which sought and received tariff concessions for its specified aluminium alloy tubes, reducing the applicable customs duty rate from 5% to free. The application and subsequent approval of the Tariff Concession Order (TCO) by the Chief Executive Officer of Customs are subject to the core criteria outlined in the Customs Act 1901, ensuring that the application is valid and meets the necessary conditions. The TCO does not impose liabilities on any person and does not affect the rights of any person as at the date of registration. Instead, it primarily benefits importers by allowing them to apply for a refund of duty on goods imported since the TCO came into force. The geographic and jurisdictional reach of this legislation is national, applying across Australia as part of the Commonwealth's customs regulations.
Key Provisions
The primary operative sections of this legislation (sections 269C, 269F, 269K(1), and 269P(3)) establish the framework through which Tariff Concession Orders (TCOs) can be applied for, assessed, and issued. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods, provided that the goods are not specified in section 269SJ, which lists those goods that cannot be subject to a TCO. The CEO must assess the application against the core criteria outlined in section 269C, which includes 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 order, as stipulated in section 269P(3). Additionally, section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions on the TCO application, although in this instance, no submissions were received.
The obligations and requirements imposed by the Act primarily fall on the CEO of Customs and the applicant for the TCO. The CEO must rigorously assess the application to ensure it meets the core criteria, specifically that no substitutable goods were produced in Australia in the ordinary course of business. If the application satisfies these criteria, the CEO is mandated to issue a TCO. The applicant must provide a valid application that includes details of the goods for which a tariff concession is sought. Furthermore, the CEO must publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made, although no submissions were received in this case.
There are no explicit offences or penalties mentioned in the explanatory statement for the failure to comply with the Act's requirements regarding the issuance of a TCO. However, the Act's provisions ensure that the rights of any person other than the Commonwealth are protected, and the rights of importers are beneficially affected. The TCO does not impose any liabilities on any person and does not disadvantage anyone by affecting their rights as at the date of registration. Instead, importers of the goods in question can apply for a refund of duty on goods imported since the TCO is taken to have come into force, as per paragraph 126(1)(r) of the Regulations.