EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803834
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.
Empire Resources Pacific Ltd applied for a TCO in respect of certain aluminium alloy plates, sheets or strip on 7 March 2008.
Instrument
TCO No 0803834 was made on 30 May 2008. It declares that those certain aluminium alloy plates, sheets or strip 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. 0803834 is taken to have come into force on 7 March 2008.
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 Parliament of Australia, establishes a framework within which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. These TCOs allow for a reduced rate of customs duty on specified goods, provided they meet certain criteria. Specifically, the Customs Act 1901 addresses the gap in tariff regulation by enabling concessions for goods that are not substitutable by Australian-produced goods. The policy objective is to ensure that imports do not undermine local industries by providing relief on certain goods, thereby balancing the interests of consumers and domestic producers. The instrument, Tariff Concession Instrument No. 0803834, was introduced to provide tariff concessions on certain aluminium alloy plates, sheets, or strip, resulting in a reduction of customs duty from 5% to free.
Scope and Application
The Customs Act 1901, through its Part XVA, provides the framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to any person or entity that seeks a reduction in customs duty on imported goods by applying for a TCO. The scope of the Act is national, applying across all states and territories of Australia. The Act does not apply to goods specified in section 269SJ, which are ineligible for tariff concessions. The Act allows the CEO to grant a TCO if no substitutable goods are produced in Australia and if the application meets the core criteria outlined in section 269C. The geographic reach of the TCO is nationwide, affecting the customs duty rates for specific goods as declared in the order. The Tariff Concession Instrument No. 0803834, for example, concerns certain aluminium alloy plates, sheets or strip, reducing their customs duty from 5% to free. This instrument came into effect on the date the application was lodged, 7 March 2008, and does not impose any liabilities or disadvantage any person other than the Commonwealth.
Key Provisions
The main provisions of Tariff Concession Instrument No. 0803834 under the Customs Act 1901 (the Act) involve the declaration of a Tariff Concession Order (TCO) for certain aluminium alloy plates, sheets, or strips (section 269P(3)). This TCO was issued on 30 May 2008, specifying that these particular goods are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995 (the Tariff), which sets a duty rate of free, as opposed to the general rate of 5% (section 269P(3)). The instrument is based on the CEO's determination that no substitutable goods were produced in Australia at the time of the application (section 269C). The TCO was made effective from 7 March 2008, the date the application was lodged, under subsection 269S(1) of the Act.
Entities and parties governed by this legislation, including the Chief Executive Officer of Customs (CEO) and applicants for TCOs, have specific obligations. The CEO must ensure that any TCO application not concerning goods specified in section 269SJ of the Act is assessed against the core criteria, which include verifying that no substitutable goods were produced in Australia in the ordinary course of business on the application date (sections 269C, 269SJ). Upon satisfying these criteria, the CEO must publish a notice in the Gazette inviting submissions from any interested parties and subsequently make a written TCO if the criteria are met (subsection 269K(1)). Furthermore, the CEO is required to consider and respond to any submissions received, although in this instance, none were lodged (subsection 269K(1)).
In terms of legal consequences, the Act does not specify any direct offences or penalties for breaching the provisions of a TCO. However, general legal obligations and duties under the Customs Act 1901 could lead to penalties if not adhered to. For example, providing false information in an application or acting in a manner contrary to the Act could result in fines or imprisonment under other sections of the Customs Act 1901, although these are not detailed in the explanatory statement. The TCO itself does not impose liabilities on any person and does not affect the rights of any person as at the date of registration, except for beneficially affecting the rights of importers who may apply for duty refunds under the Regulations (paragraph 126(1)(r) of the Regulations).