EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804189
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.
Selkirk Brick Pty Ltd applied for a TCO in respect of certain refractory blocks on 17 March 2008.
Instrument
TCO No 0804189 was made on 6 June 2008. It declares that those certain refractory blocks 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. 0804189 is taken to have come into force on 17 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 Australian Parliament, provides the legislative framework for the administration of customs and excise in Australia. To address specific economic or trade-related needs, the Act allows for the creation of Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs may apply reduced rates of customs duty on certain goods. The explanatory statement for Tariff Concession Instrument No. 0804189, made on 6 June 2008, details the process by which Selkirk Brick Pty Ltd successfully applied for a TCO for certain refractory blocks, which now enjoy a duty-free status as per item 50 of Schedule 4 to the Customs Tariff Act 1995. The instrument was published in the Gazette with an invitation for submissions, none of which were received, and it came into effect on the date the application was lodged, 17 March 2008, without imposing any liabilities on persons other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0804189 under the Customs Act 1901 applies to individuals and entities seeking tariff concessions on specific goods, namely certain refractory blocks, which Selkirk Brick Pty Ltd applied for on 17 March 2008. The Act allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that reduce the rate of customs duty on goods that are not substitutable by any goods produced in Australia in the ordinary course of business. In this instance, the CEO determined that no such substitutable goods were produced domestically, and therefore, the refractory blocks were eligible for a tariff concession. The application of the TCO is effective from the date the application was lodged, which is 17 March 2008, and the instrument itself was registered on 6 June 2008. The TCO does not affect any rights or liabilities of persons other than the Commonwealth as of the date of registration, nor does it impose any new liabilities. Importers of the affected goods can benefit from this concession by applying for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of this legislation focus on the creation and application of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows for the application to the Chief Executive Officer of Customs (CEO) for a TCO for certain goods, provided they do not fall under the exclusions listed in section 269SJ. If the application is deemed valid, the CEO is mandated to make a written order under section 269P(3) declaring the goods to which the specified tariff concession applies. For example, TCO No. 0804189, made on 6 June 2008, declared certain refractory blocks to be subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty rate of free, down from the general rate of 5%.
The obligations imposed by the Act on the parties it governs include the requirement for the CEO to assess the validity of the TCO application against the core criteria set out in sections 269C and 269P. The CEO must also ensure that the application does not pertain to goods that are explicitly excluded from TCOs under section 269SJ. Furthermore, as per section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties regarding the proposed TCO. In the case of TCO No. 0804189, no submissions were received.
The Act also outlines the consequences for non-compliance. While the explanatory statement does not detail specific offences, penalties, or civil/criminal consequences for breach, it is implied that failure to comply with the requirements for TCO applications or the conditions set out in the Act could lead to legal action. The Act’s provisions ensure that the rights of importers are protected and that the TCO does not impose any new liabilities on them, as long as they pertain to actions taken before the TCO's effective date. The Customs Act 1901 and associated regulations would need to be consulted for specific details on penalties and enforcement mechanisms.