EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0718969
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.
Hunter Douglas Ltd applied for a TCO in respect of certain aluminium alloy sheet and/or strip coils on 7 November 2007.
Instrument
TCO No 0718969 was made on 21 February 2008. It declares that those certain aluminium alloy sheet and/or strip coils 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. 0718969 is taken to have come into force on 7 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, provides a framework for the imposition of customs duties on imported goods, amongst other provisions. The Act was updated to include provisions for Tariff Concession Orders (TCOs) to address the need for tariff reductions on specific goods that are not produced domestically, thereby fostering fair competition and encouraging the use of imported goods where local production is not feasible. Under this Act, the Chief Executive Officer of Customs has the authority to issue TCOs, which can reduce or eliminate customs duty on certain goods if no substitutable goods are produced in Australia. The policy objective of this legislative framework is to ensure that the application of customs duties supports economic efficiency and does not unduly burden industries reliant on imported raw materials.
Tariff Concession Instrument No. 0718969, made in 2008, is an example of how this legislative scheme operates in practice. Hunter Douglas Ltd applied for and was granted a TCO for certain aluminium alloy sheet and/or strip coils, effective from 7 November 2007. This TCO, which was made after the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, resulted in the general customs duty rate of 5% being reduced to free for these specific goods. This concession benefits importers by potentially reducing their duty costs and aligns with the broader policy aim of supporting industries that rely on imported materials.
Scope and Application
The Tariff Concession Instrument No. 0718969, under the Customs Act 1901, applies to the specific goods of certain aluminium alloy sheet and/or strip coils for which Hunter Douglas Ltd applied for a tariff concession order on 7 November 2007. The Act allows the Chief Executive Officer of Customs to grant tariff concessions on goods not produced in Australia in the ordinary course of business, effectively reducing the customs duty from the general rate of 5% to free for the specified goods. This instrument extends to the Commonwealth jurisdiction and applies to any person or entity importing the designated goods. The instrument does not exclude or exempt any particular entities or industries from its scope, provided they are importing the specific goods in question. The instrument came into effect on the day the application was lodged, 7 November 2007, and does not retroactively affect any rights or liabilities incurred prior to its registration, thereby ensuring that importers can apply for duty refunds for imports made since the effective date.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0718969 (the Instrument) are sections 269C, 269P, and 269S of the Customs Act 1901 (the Act). Section 269C specifies the core criteria for a Tariff Concession Order (TCO) application, which must be met for the Chief Executive Officer of Customs (the CEO) to consider granting the order. According to this section, a TCO application is valid if, on the day the application was submitted, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P(3) mandates that if the CEO determines the application meets the core criteria, a written order must be issued, declaring the goods in question as subject to a prescribed tariff item. Section 269S outlines the effective date of the TCO, which is the day the application was lodged.
The Act imposes certain obligations on the parties involved. Firstly, the CEO must assess whether a TCO application meets the core criteria outlined in section 269C. If the application is deemed valid, the CEO is obligated to issue a written TCO, as stipulated in section 269P. Furthermore, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may oppose the issuance of the TCO, in accordance with section 269K(1). If no submissions are received, the CEO proceeds with issuing the TCO.
Under the Act, failure to comply with the requirements for issuing a TCO may result in legal consequences. The Act does not explicitly list offences, penalties, or specific consequences for breach in this context. However, the process outlined ensures that the CEO adheres to the legislative framework, and any failure to follow the prescribed steps could potentially be challenged in court, leading to judicial review or other legal actions. The precise penalties for non-compliance would be determined by the court based on the specific circumstances of the breach.