EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0703820
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.
Stirlings Holdings Pty Ltd applied for a TCO in respect of certain stainless steel channels on 13 March 2007.
Instrument
TCO No 0703820 was made on 8 June 2007. It declares that those certain stainless steel channels 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 0%.
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. 0703820 is taken to have come into force on 13 March 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, enacted by the Parliament of Australia, introduced the framework for Tariff Concession Orders (TCOs) to provide tariff concessions on certain imported goods. These concessions are intended to benefit Australian businesses by reducing the customs duty payable on specific goods, thereby making them more competitive within the domestic market. Stirlings Holdings Pty Ltd sought a TCO for certain stainless steel channels, leading to Tariff Concession Instrument No. 0703820, which was issued on 8 June 2007. The policy objective of this instrument was to provide a zero percent duty rate on the specified stainless steel channels, as no substitutable goods were being produced in Australia, aligning with the criteria stipulated in the Customs Act 1901. The instrument was published in the Gazette, inviting submissions but did not receive any. The TCO was effective from the date of the application, 13 March 2007, and allowed importers to apply for duty refunds for goods imported since that date, without imposing any new liabilities.
Scope and Application
The Tariff Concession Instrument No. 0703820, under the Customs Act 1901, applies to the goods for which Sterlings Holdings Pty Ltd has applied for a Tariff Concession Order (TCO). Specifically, it applies to certain stainless steel channels which the instrument declares are goods to which a lower rate of customs duty applies as specified in the Customs Tariff Act 1995. The application of the TCO is limited to goods for which a TCO can be made, excluding those specified under section 269SJ of the Customs Act 1901, and it only applies to imports after the date the application was lodged. The instrument does not affect the rights of any person prior to its registration and does not impose any liabilities on individuals, thereby ensuring that the rights of importers are beneficially affected. The scope of the Act extends nationally across Australia, as it is a Commonwealth Act, and it does not distinguish based on state or territory jurisdiction. Any subordinate instruments that may further detail or extend the application of this Act would be made under the authority provided by the Customs Act 1901.
Key Provisions
The key sections of this legislation, specifically under Part XVA of the Customs Act 1901, involve the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Under section 269F, a person may apply to the CEO for a TCO in respect of goods, provided the goods are not specified in section 269SJ, which outlines those goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria, they are required to make a TCO under section 269P(3). These core criteria are defined in section 269C, which states that the application meets the criteria if no substitutable goods were produced in Australia on the day the application was lodged. Definitions for terms such as "goods produced in Australia", "ordinary course of business", and "substitutable goods" are provided in sections 269D, 269E, and 269B respectively.
The obligations imposed by the Act on the CEO include ensuring that applications for TCOs are assessed against the core criteria and that the application is not in respect of goods specified in section 269SJ. Once an application is accepted as valid, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as stipulated in section 269K(1). If no submissions are received, the CEO must proceed to make the TCO if the application meets the criteria. The TCO must be made in writing and declare that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The legislation also outlines consequences for non-compliance. If the CEO fails to properly assess an application or makes a TCO without meeting the statutory criteria, they may face legal challenges or penalties as outlined in the overarching customs legislation. Although the specific penalties are not detailed in the Explanatory Statement, breaches of customs regulations typically carry substantial fines and potential imprisonment under the Customs Act 1901. The TCO itself does not impose liabilities on any person but allows for the refund of duty on goods imported since the day the TCO is taken to have come into force, as per paragraph 126(1)(r) of the Regulations.