EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0718915
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.
CMI Operations Pty Ltd applied for a TCO in respect of certain stainless steel bar and rods on 07 November 2007.
Instrument
TCO No 0718915 was made on 29 January 2008. It declares that those certain stainless steel bar and rods 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. 0718915 is taken to have come into force on 07 November 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 Australian Parliament, established a framework for the regulation of customs and excise duties in Australia. One of the mechanisms introduced to provide tariff relief to specific goods is through Tariff Concession Orders (TCOs), which allow for the reduction or exemption of customs duty on certain goods under specific circumstances. The Tariff Concession Instrument No. 0718915, enacted in 2008, addresses the need to provide tariff relief for certain stainless steel bar and rods by declaring that these goods are subject to a free rate of duty rather than the general rate of 5%. This was achieved by applying item 50 of Schedule 4 to the Customs Tariff Act 1995. The legislation ensures that the rights of importers are positively affected, allowing them to apply for a refund of duty on goods imported since the day the TCO came into force, without imposing any liabilities on any person.
Scope and Application
The Tariff Concession Instrument No. 0718915 under the Customs Act 1901 applies specifically to certain stainless steel bar and rods, granting them a lower rate of customs duty, specifically making it free, compared to the general rate of duty which is 5%. This concession is applicable to goods that are subject to the application made by CMI Operations Pty Ltd on 07 November 2007, and it was formalised on 29 January 2008 when the Chief Executive Officer of Customs was satisfied that no substitutable goods were produced in Australia. The instrument is part of a broader scheme under Part XVA of the Customs Act 1901, which allows for Tariff Concession Orders (TCOs) to be made to provide relief on customs duty for certain goods. The instrument's application is limited to the particular goods specified in the TCO and does not extend to any other goods unless specifically included in a subsequent TCO. The TCO does not adversely affect any person’s rights as at the date of registration and does not impose any liabilities on any person.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0718915 include section 269C, which establishes the core criteria for a Tariff Concession Order (TCO) application, and section 269P(3), which mandates the creation of a written TCO order if these criteria are met. Section 269SJ specifies the types of goods that cannot be subject to a TCO. Section 269K(1) requires the Chief Executive Officer of Customs (CEO) to publish a notice in the Gazette inviting submissions on a valid TCO application, while section 269S(1) stipulates that a TCO comes into force on the date the application is lodged.
The Act imposes several obligations on parties involved in the TCO process. A person must apply to the CEO for a TCO under section 269F, ensuring that the application pertains to goods not listed in section 269SJ. The CEO, upon receiving a valid application, must assess whether it meets the core criteria outlined in section 269C, particularly that no substitutable goods are produced in Australia. If the criteria are met, the CEO must issue a written TCO order under section 269P(3). Additionally, as per section 269K(1), the CEO is required to publish a notice in the Gazette and invite submissions regarding the TCO application, although no submissions were received for TCO No. 0718915.
The Act does not specify any offences or penalties for breaches related to TCO applications or the issuance of TCOs. However, the consequences of not complying with the TCO process could potentially involve disputes over the validity of the TCO, which would need to be resolved through the relevant legal mechanisms. Furthermore, the Act ensures that the TCO does not affect the rights of persons other than the Commonwealth as at the date of registration, nor does it impose any liabilities on any person, as outlined in section 269S(1).
While the Act does not detail specific penalties for breaches, it does clarify that the TCO does not disadvantage any person or impose liabilities for actions taken before the TCO's effective date. Importers, however, benefit from the ability to apply for a refund of duty on goods imported since the TCO came into force, as per paragraph 126(1)(r) of the Regulations. The overall framework is designed to ensure that tariff concessions are granted fairly and without undue hardship to affected parties.