EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804137
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.
The Trustee For Selkirk Brick Unit Trust applied for a TCO in respect of certain refractory tiles on 14 March 2008.
Instrument
TCO No 0804137 was made on 30 May 2008. It declares that those certain refractory tiles 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. 0804137 is taken to have come into force on 14 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 Tariff Concession Order No. 0804137, made under the Customs Act 1901, was introduced to address the need for reduced customs duty rates on specific goods that are not produced domestically, thereby promoting economic efficiency and competitiveness. Enacted by the Chief Executive Officer of Customs in response to an application from the Trustee For Selkirk Brick Unit Trust, this instrument provides a tariff concession for certain refractory tiles, setting their duty rate to free, in contrast to the general rate of 5%. This concession was granted after it was determined that no substitutable goods were produced in Australia in the ordinary course of business. The policy objective aligns with the overarching aim of the Customs Act to facilitate trade while ensuring fair competition, particularly by supporting industries that rely on imported materials.
The instrument was made effective from the date of the application, 14 March 2008, and was published in the Gazette with an invitation for public submissions, none of which were received. The Tariff Concession Order ensures that the rights of importers are positively affected, allowing them to apply for duty refunds on goods imported since the effective date, without imposing any new liabilities on non-Commonwealth entities. This legislative measure underscores the government's commitment to aiding local industries through strategic tariff adjustments.
Scope and Application
The Tariff Concession Instrument No. 0804137 operates under the Customs Act 1901, which governs the imposition and regulation of customs duties in Australia. This particular instrument applies to the goods specified in the application, which, in this case, are certain refractory tiles. The application for a Tariff Concession Order (TCO) was made by the Trustee For Selkirk Brick Unit Trust on 14 March 2008, and the CEO of Customs was satisfied that the application met the core criteria, as no substitutable goods were produced in Australia at the time of the application. Consequently, the CEO made a TCO on 30 May 2008, declaring that the refractory tiles are subject to a rate of duty of free, as opposed to the general rate of 5%. The TCO came into force on the day the application was lodged, which was 14 March 2008, and it does not affect the rights of any person in respect of anything done before this date. The TCO aims to benefit importers by allowing them to apply for a refund of duty on the specified goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0804137 are found in sections 269C, 269F, and 269P of the Customs Act 1901. Section 269F allows for an application to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). If the CEO is satisfied that the application is valid and meets the core criteria specified in section 269C, they must make a written TCO order. Section 269P(3) specifies that the CEO must make a written order declaring that the goods subject to the TCO application are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on parties or entities include the requirement for applicants to ensure their application is valid, and for the CEO to carefully assess each application against the criteria in section 269C. The CEO must also publish a notice in the Gazette inviting any interested parties to submit reasons why a TCO should not be made, as per subsection 269K(1). The CEO must make their decision based on these submissions and the merits of the application. The TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration, ensuring that it does not disadvantage or impose liabilities on anyone for actions taken prior to the registration date.
Breaches of the provisions under the Customs Act 1901 that govern TCOs could lead to civil or criminal consequences. However, the Explanatory Statement does not explicitly outline specific offences or penalties for breaches of the TCO itself. Typically, breaches of the Customs Act can result in penalties, including fines and imprisonment, depending on the severity and intent of the breach. The maximum penalties for contravening the Customs Act can extend to $22,000 or imprisonment for five years, or both, for individuals, and higher penalties for corporations. The precise penalties would be determined based on the specific nature of the breach and relevant provisions of the Customs Act.