EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701688
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.
Specialised Alloys Services Pty Ltd applied for a TCO in respect of certain seamless copper-nickel alloy tubes on 31 January 2007.
Instrument
TCO No 0701688 was made on 01 May 2007. It declares that those certain seamless copper-nickel 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. 0701688 is taken to have come into force on 31 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 Customs Act 1901 was amended to include the creation of Tariff Concession Orders (TCOs) under Part XVA, providing a framework for the Chief Executive Officer of Customs (CEO) to reduce customs duty on certain goods. This initiative was introduced to address the need for tariff adjustments that can foster economic growth by making specific goods more competitively priced, thus potentially encouraging their importation and use in Australia. The CEO can make a TCO if satisfied that an application meets core criteria, such as the absence of substitutable goods produced in Australia. The enactment of Tariff Concession Instrument No. 0701688 in 2007 by the CEO under this Act, exemplifies the application of this legislative framework, providing tariff concessions on seamless copper-nickel alloy tubes, thus promoting their importation and use without burdening Australian producers. The policy objective is to enhance economic efficiency and support industries that rely on these imported goods.
Scope and Application
The Customs Act 1901, through its Part XVA, enables the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that lower the rate of customs duty on specified goods. These orders apply to any goods that meet the core criteria outlined in the Act, particularly if no substitutable goods are produced in Australia in the ordinary course of business at the time the application for the TCO is lodged. The application process involves the CEO evaluating whether the goods specified in the application can be considered substitutable and if they are produced domestically. If the CEO is satisfied that the application meets the criteria, a TCO is issued, providing a concession on the duty rate as specified in the Customs Tariff Act 1995. This legislation is applicable across the Commonwealth and affects entities such as importers who can benefit from duty refunds for goods imported from the date the TCO is taken to have come into force. The application does not disadvantage any person by affecting their rights as at the date of registration, nor does it impose any liabilities on individuals other than the Commonwealth. The scope of the Act is extended through subordinate instruments, which may further detail the application and enforcement of the TCOs.
Key Provisions
The Tariff Concession Instrument No. 0701688, under the Customs Act 1901, allows for a concession on customs duty for certain seamless copper-nickel alloy tubes. This concession is made pursuant to section 269F, which allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) regarding specific goods. If the CEO is satisfied that the application is not for goods specified in section 269SJ, which lists goods ineligible for a TCO, the CEO must assess whether the application meets the core criteria as outlined in section 269C. This involves determining if, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined in sections 269D and 269E. In the case of the seamless copper-nickel alloy tubes, the CEO found that no such substitutable goods were produced, thus meeting the core criteria.
The obligations imposed on parties under this legislation include the requirement for the CEO to make a written TCO if the application meets the core criteria, as stipulated in section 269P(3). Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. In this instance, the CEO did not receive any submissions in response to the published notice. The TCO is considered to have come into effect on the date the application was lodged, as per subsection 269S(1).
The Act does not specify any offences, penalties, or consequences for failing to comply with the requirements of a TCO. However, the rights of importers will be beneficially affected, as they will be able to apply for a refund of duty on goods imported since the TCO is taken to have come into force, under paragraph 126(1)(r) of the Regulations. The TCO does not impose any liabilities on any person, as per the Act, ensuring that the rights of individuals other than the Commonwealth are not adversely affected by the concession.