EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804357
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.
Rio Tinto Aluminium Limited applied for a TCO in respect of certain corrugated galvanised steel tunnels on 17 April 2008.
Instrument
TCO No 0804357 was made on 11 July 2008. It declares that those certain corrugated galvanised steel tunnels 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. 0804357 is taken to have come into force on 17 April 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 Instrument No. 0804357 was enacted in 2008 under the Customs Act 1901, which provides a framework for the application of tariff concessions on certain imported goods. This specific instrument addresses the issue of providing tariff concessions to importers of certain corrugated galvanised steel tunnels by Rio Tinto Aluminium Limited. The instrument was enacted by the Chief Executive Officer of Customs following an application from the company, in accordance with the provisions of the Customs Act. The policy objective of this instrument is to provide tariff concessions for imported goods that are not produced domestically and have no substitutable goods available in Australia, thereby supporting the importation of specific goods that are not manufactured locally.
The instrument was effective from 17 April 2008, the date on which the tariff concession application was lodged, and it does not affect the rights of any person other than the Commonwealth or impose any liabilities on any person. Importers of the specified goods are entitled to apply for a refund of duty on goods imported since the date the tariff concession order came into effect. This instrument demonstrates the Australian government’s commitment to facilitating trade and supporting the importation of goods that are not produced domestically.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCO) scheme, provides a mechanism for the Chief Executive Officer of Customs to offer reduced or waived customs duty on specific goods, provided certain criteria are met. This scheme applies to entities or individuals who seek tariff concessions for goods that are not produced in Australia or are not substitutable by locally produced goods. The scope of the Act encompasses various industries and transactions involving the importation of goods, and it operates under both Commonwealth and state jurisdictions as it pertains to customs duties. Notably, the Act excludes certain goods specified in section 269SJ from being subject to a TCO. The geographic reach of this legislation is national, as it applies to all territories within Australia. The application of the Act can be extended or restricted through subordinate instruments, which may include regulations or further orders issued by the CEO under the authority of the Customs Act 1901. The TCO in question, No. 0804357, was issued to Rio Tinto Aluminium Limited for certain corrugated galvanised steel tunnels, effectively granting them a free duty rate from the date the application was lodged.
Key Provisions
The primary operative sections of this legislation revolve around the creation and application of Tariff Concession Orders (TCOs) as outlined in Part XVA of the Customs Act 1901. Section 269F allows any person to apply to the Chief Executive Officer (CEO) of Customs for a TCO regarding certain goods, provided those goods are not specified in section 269SJ, which lists goods ineligible for a TCO. Section 269C mandates that the CEO must decide if the application meets the core criteria, which includes verifying that no substitutable goods were produced in Australia at the time of the application (section 269P(3)). If the criteria are satisfied, the CEO must issue a written TCO specifying the applicable item in Schedule 4 to the Customs Tariff Act 1995. For example, TCO No. 0804357 applies a 0% duty rate to certain corrugated galvanised steel tunnels, reducing the general duty rate from 5%.
The obligations imposed by the Act on the parties involved are straightforward. The CEO of Customs is required to process applications for TCOs and determine if they meet the core criteria specified in the Act. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who might oppose the TCO. Importers of the goods in question must ensure their goods comply with the conditions specified in the TCO, and they may apply for a refund of any duties paid prior to the effective date of the TCO under the Regulations.
In terms of enforcement and consequences, the Act does not explicitly detail criminal or civil penalties for breach of its provisions. However, failure to comply with the conditions set out in a TCO could lead to disputes or legal actions regarding the refund of duties or the validity of the concession. Importers who do not adhere to the terms of the TCO might face challenges in their claims for duty refunds, as outlined in the Customs (Prohibited Imports) Regulations 1956. Moreover, the Act ensures that the TCO does not retroactively affect the rights of any person, ensuring that no new liabilities are imposed on anyone for actions taken before the TCO's effective date.