Overview

The Customs Act 1901, enacted by the Australian Parliament, establishes a framework under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This Act addresses the gap in providing tariff concessions for certain imported goods that are not produced domestically and are essential for various industries. The policy objective is to facilitate the import of goods at reduced duty rates, thereby supporting economic activities by making essential goods more affordable. The Tariff Concession Instrument No. 0713586, made on 2 November 2007, is an example of this process in action, granting a tariff concession on certain refractory bricks and shapes, reducing their duty rate from 5% to 0%. This concession was granted following an application by Bhp Billiton Olympic Dam Corporation Pty Ltd and subsequent determination by the CEO that no substitutable goods were produced in Australia, satisfying the core criteria for such concessions.

Scope and Application

The Tariff Concession Instrument No. 0713586 applies to goods specified in the instrument, in this case, certain refractory bricks and/or shapes, which are subject to a tariff concession order made under section 269F of the Customs Act 1901. The concession applies to the entity that made the application, Bhp Billiton Olympic Dam Corporation Pty Ltd, and benefits importers of these goods by reducing the rate of customs duty from 5% to 0%. The Act applies to the Commonwealth and operates on a national level, with the tariff concession affecting the importation of goods into Australia. The concession does not apply to goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The Act may extend its application through subordinate instruments, such as regulations, to further define terms and processes, but this particular instrument does not indicate any such extensions or restrictions.

Key Provisions

The Customs Act 1901 sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (CEO) (s 269F). A lower rate of customs duty applies to goods that are the subject of a TCO (s 269P(3)). 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 (s 269C). ‘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 (s 269B, s 269D, s 269E). 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 (s 269P(3)). The Act imposes several obligations and requirements on the parties involved. The CEO must decide whether a TCO application meets the core criteria, which includes determining whether no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (s 269C). The CEO must also ensure that the goods specified in the application are not those listed in section 269SJ of the Act, which sets out goods that cannot be subject to a TCO (s 269F). If the CEO is satisfied that the application meets the core criteria, they must make a written order declaring that the goods are subject to the prescribed item of Schedule 4 to the Tariff (s 269P(3)). Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as a valid application, inviting any person who considers there are reasons why the TCO should not be made to lodge a submission with the CEO (s 269K(1)). The Act does not specify any offences or penalties for breach of its provisions regarding TCOs. However, the CEO has the discretion to decide whether to make a TCO based on the core criteria, and any decision made by the CEO can be subject to review or challenge in the appropriate legal forums. The TCO itself affects the customs duty rates applicable to the specified goods, with the rights of importers being beneficially affected, including the ability to apply for a refund of duty on goods imported since the TCO is taken to have come into force (Reg 126(1)(r)). In summary, the Customs Act 1901 provides a framework for the creation of Tariff Concession Orders, which lower the rate of customs duty on specified goods. The CEO must ensure that applications meet the core criteria and that the goods are not excluded under section 269SJ. If the application is valid, the CEO must issue a TCO, and the order will come into force on the date the application was lodged. There are no explicit penalties for breach, but the CEO’s decisions can be reviewed. The rights of importers are beneficially affected, allowing them to apply for duty refunds on goods imported since the TCO’s effective date.