EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701555
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.
Sumikin Bussan Oceania Pty Ltd applied for a TCO in respect of certain alloy steel forged round bars on 29 January 2007.
Instrument
TCO No 0701555 was made on 20 April 2007. It declares that those certain alloy steel forged round 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. 0701555 is taken to have come into force on 29 January 2007.
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. 0701555 was enacted in 2007 under the Customs Act 1901, to address the need for concessional tariffs on specific imported goods that are not produced in Australia. The Customs Act 1901 provides a framework for the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCOs), which lower the rate of customs duty on specified goods. This particular instrument was introduced in response to an application by Sumikin Bussan Oceania Pty Ltd for a TCO on certain alloy steel forged round bars. The CEO was satisfied that no substitutable goods were being produced domestically and thus, the instrument was issued to apply a free rate of duty on these goods, down from the general rate of 5%. The instrument aims to facilitate the importation of these goods by reducing the financial burden on importers, aligning with the policy objective of supporting industry competitiveness and access to necessary materials.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes the framework for Tariff Concession Orders (TCOs), which allow for reduced rates of customs duty on certain goods. The Act applies to any person or entity seeking to import goods that may benefit from a lower duty rate as per a TCO. The legislation is primarily concerned with the conduct of applying for and being granted a TCO, and it impacts transactions involving the importation of specified goods. Jurisdictionally, the Act operates under the Commonwealth, meaning that the provisions apply across Australia. However, the application and effect of a TCO are subject to the conditions outlined in the Customs Tariff Act 1995, where specific tariff rates are detailed. The Act excludes certain goods, as listed in section 269SJ, from being subject to a TCO. Additionally, the CEO of Customs must ensure that no substitutable goods are produced in Australia before granting a TCO. The legislation allows for the extension or restriction of its application through subordinate instruments, although in this particular case, no submissions were received in response to the published notice inviting objections to the TCO.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0701555 under the Customs Act 1901 (sections 269C, 269P, and 269S) establish the framework for tariff concessions on certain goods. Specifically, section 269C sets out the core criteria for tariff concession orders (TCOs), which include the condition that no substitutable goods are produced in Australia on the date the application is lodged. Section 269P mandates that if the CEO is satisfied that these criteria are met, a written TCO must be issued. Section 269S specifies that a TCO comes into force on the date the application is lodged. This instrument applies to certain alloy steel forged round bars, which are declared to be subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty-free status for these goods.
The obligations and requirements imposed by the Act on the parties it governs include the necessity for applicants to ensure their applications meet the core criteria outlined in section 269C. This involves demonstrating that no substitutable goods are produced in Australia in the ordinary course of business on the date the application is lodged. The CEO is required to publish a notice in the Gazette inviting submissions from interested parties, as stipulated in section 269K(1). Furthermore, the CEO must make a decision on whether to issue a TCO based on the application and any received submissions. In this case, the CEO issued TCO No. 0701555 after confirming that no substitutable goods were produced in Australia, thereby meeting the core criteria.
There are no explicit offences, penalties, or civil/criminal consequences outlined in the Act for breach of the TCO provisions. However, the Act does state that the TCO does not affect the rights of persons (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. This means that while the TCO benefits importers by allowing them to apply for duty refunds on goods imported since the effective date of the TCO, it does not impose any new liabilities on any person. The rights of existing parties are protected, and the TCO is designed to provide tariff concessions without retroactive imposition of new obligations or penalties.