EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0800039
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.
IHI Engineering Australia applied for a TCO in respect of certain steel pipe on 28 December 2007.
Instrument
TCO No 0800039 was made on 24 May 2008. It declares that those certain steel pipe 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. One submission objecting to the TCO application was received from Onesteel Manufacturing Pty Ltd.
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. 0800039 is taken to have come into force on 28 December 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, establishes a framework for the regulation of imports and exports, including the imposition of customs duty. To address specific economic or policy needs, the Act allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs), which provide reduced rates of customs duty on certain goods. The Tariff Concession Instrument No. 0800039, made on 24 May 2008, is an example of such an order, granting free tariff treatment to certain steel pipes applied for by IHI Engineering Australia, effective from 28 December 2007, the date the application was lodged. This concession was granted after the CEO determined that no substitutable goods were produced in Australia at the time of application. The policy objective behind such concessions is to potentially stimulate economic activity by making imported goods more competitively priced, thereby encouraging trade and consumption of these goods within Australia.
Scope and Application
The Tariff Concession Instrument No. 0800039 under the Customs Act 1901 applies specifically to the goods identified in the instrument, which, in this case, are certain steel pipes. This Act facilitates the application process for Tariff Concession Orders (TCOs), which effectively reduce or eliminate the customs duty on specified goods, thereby benefiting the importers of those goods. The process involves an application to the Chief Executive Officer of Customs, who must determine whether the application meets the core criteria stipulated under the Act, particularly ensuring that no substitutable goods are produced in Australia. The application process also requires consultation, wherein any objections to the TCO must be considered, as was the case with the submission from Onesteel Manufacturing Pty Ltd. The geographic reach of the Act is national, given its Commonwealth nature, and it applies to any entity or individual involved in the import of the specified goods. The Act does not specify exclusions or thresholds beyond those outlined in section 269SJ of the Customs Act 1901, which details goods that cannot be subject to a TCO. The application of the Act can be extended or restricted through subordinate instruments, such as the Customs Tariff Act 1995, which sets the prescribed duty rates for goods.
Key Provisions
The main operative sections of this legislation include section 269C, which sets out the core criteria that must be met for a Tariff Concession Order (TCO) to be made, and section 269P(3), which provides that if the Chief Executive Officer of Customs (the CEO) is satisfied that the application meets the core criteria, the CEO must make a written order declaring the goods to which the TCO applies. Section 269K(1) also requires the CEO to publish a notice in the Gazette inviting submissions from any person who considers there are reasons why the TCO should not be made. The Tariff Concession Instrument No. 0800039 made under this legislation declares that certain steel pipes are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, and the rate of duty for these goods is free.
The obligations and requirements imposed by this Act on the parties or entities it governs include the requirement for a person to apply to the CEO for a TCO in respect of goods under section 269F, and for the CEO to decide whether the application meets the core criteria under section 269C. The CEO must also publish a notice in the Gazette inviting submissions from any person who considers there are reasons why the TCO should not be made under section 269K(1). If the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order declaring the goods to which the TCO applies under section 269P(3). 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 under paragraph 126(1)(r) of the Regulations.
There are no specific offences, penalties, or civil/criminal consequences for breach of this legislation. However, 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, and the TCO does not impose any liabilities on any person. Any objections to the TCO application must be lodged with the CEO before the TCO comes into force.