EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0710967
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.
Onesteel NSW Pty Limited applied for a TCO in respect of certain tilting electric arc furnace parts on 10 July 2007.
Instrument
TCO No 0710967 was made on 21 September 2007. It declares that those certain tilting electric arc furnace parts 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. 0710967 is taken to have come into force on 10 July 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. 0710967, enacted in 2007, is an amendment under the Customs Act 1901 designed to address the specific issue of providing tariff concessions for certain goods. This legislative instrument was created to provide relief in the form of reduced customs duties for particular goods that are not produced in Australia and for which no suitable substitutes are available domestically. The enacting body for this instrument is the Chief Executive Officer of Customs, who has the authority to make Tariff Concession Orders (TCOs) under section 269F of the Act. The primary policy objective of this legislation is to encourage the import of goods that are not manufactured in Australia, thereby supporting economic efficiency and consumer choice by providing access to a broader range of products at potentially lower costs.
The instrument was introduced following an application by Onesteel NSW Pty Limited for tariff concessions on certain tilting electric arc furnace parts. The CEO determined that these goods qualified for a tariff concession as no substitutable goods were produced in Australia. As a result, TCO No. 0710967 was issued, which declared that these specific goods are subject to a duty rate of free, down from the general rate of 5%. The TCO came into effect on 10 July 2007, the date of the application, and does not affect the rights of any person other than the Commonwealth, nor does it impose any new liabilities. Importers of these goods can apply for a refund of duty paid on imports since the effective date of the TCO.
Scope and Application
The Tariff Concession Instrument No. 0710967 made under the Customs Act 1901 applies to certain tilting electric arc furnace parts specified in the instrument. This instrument was created in response to an application by Onesteel NSW Pty Limited on 10 July 2007, and it came into force on the same date. The instrument was made by the Chief Executive Officer of Customs (CEO) who was satisfied that no substitutable goods were produced in Australia on the date the application was lodged, thereby meeting the core criteria set out in section 269C of the Act. The instrument declares that the specified goods are subject to a lower rate of customs duty as per item 50 of Schedule 4 to the Customs Tariff Act 1995, reducing the general rate of duty from 5% to free. The instrument also ensures that it does not affect the rights of any person, except to the benefit of importers who can apply for a refund of duty on goods imported since the date the Tariff Concession Order was taken to have come into force.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0710967 under the Customs Act 1901 (section 269F) detail the process by which an application for a Tariff Concession Order (TCO) is made and approved by the Chief Executive Officer of Customs (CEO). The instrument provides that an application for a TCO can be made by any person, and if the CEO is satisfied that the application meets certain criteria, a TCO will be issued (sections 269C and 269P(3)). The instrument specifically addresses tilting electric arc furnace parts, which will now attract a concessional rate of duty under item 50 of Schedule 4 to the Customs Tariff Act 1995. This concessional rate is set at free, as opposed to the general rate of 5% (section 269P(3)). The instrument also specifies the commencement date, which is the day the application was lodged, in this case, 10 July 2007 (subsection 269S(1)).
Under this legislation, the CEO is required to assess the application to ensure it meets the core criteria, specifically that no substitutable goods were produced in Australia at the time the application was lodged (section 269C). The CEO must also publish a notice in the Gazette inviting any person who might have concerns about the application to lodge a submission (subsection 269K(1)). If no submissions are received, the CEO must proceed with issuing the TCO. In this case, no submissions were received, and the TCO was issued on 21 September 2007. Additionally, the CEO must ensure that the rights of any person, other than the Commonwealth, are not adversely affected by the TCO (subsection 269S(2)).
The instrument outlines specific obligations and requirements for the parties involved. The CEO is required to carefully assess applications to ensure they meet the core criteria and that no substitutable goods are produced in Australia at the time of application (section 269C). The CEO must also publish a notice in the Gazette to invite submissions from any interested parties (subsection 269K(1)). Furthermore, the CEO must ensure that the TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person (subsection 269S(2)). Importers, who are the primary beneficiaries of the TCO, are required to apply for a refund of duty on goods imported since the TCO was taken to have come into force (paragraph 126(1)(r) of the Regulations).
The Act does not specify any particular offences, penalties, or consequences for breach related to the issuance or operation of a TCO. However, the instrument ensures that any person, other than the Commonwealth, will not be disadvantaged by the TCO and will not be imposed with any liabilities due to actions taken before the TCO was registered (subsection 269S(2)). Therefore, any adverse consequences would stem from a failure to comply with the process outlined in the Act, rather than from specific penalties for breach of the TCO itself.