EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0806496
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.
Boral Montoro Pty Limited applied for a TCO in respect of certain refractory cassette h shape on 05 May 2008.
Instrument
TCO No 0806496 was made on 01 August 2008. It declares that those certain refractory cassette h shapes 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. 0806496 is taken to have come into force on 05 May 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 a framework for the administration of customs and excise duties, including the mechanism for Tariff Concession Orders (TCOs) which allow for the reduction or exemption of customs duties on certain goods. The Tariff Concession Instrument No. 0806496, introduced in 2008, was developed to address specific economic and trade policy objectives by providing tariff concessions to particular goods not produced domestically, thus encouraging import competition and consumer choice. The policy objective of this instrument was to reduce the customs duty on certain refractory cassette h shapes from the general rate of 5% to free, thereby benefiting importers and potentially consumers by lowering the cost of these goods. This was enacted in accordance with the process outlined in the Customs Act, where the Chief Executive Officer of Customs (CEO) assesses applications against core criteria and, if satisfied, issues a TCO. The instrument came into effect on the date of application, 05 May 2008, with no retroactive liabilities imposed on individuals or entities, and provides a pathway for duty refunds to importers.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the implementation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which allow for lower rates of customs duty on specified goods. This legislation applies to individuals and entities seeking to import goods that meet the criteria for tariff concessions. It is a Commonwealth Act, thus having jurisdiction across Australia. The Act excludes certain goods specified in section 269SJ, which cannot be subject to a TCO. The scope of the Act can be extended or modified through subordinate instruments, such as regulations. For instance, the Customs Tariff Act 1995's Schedule 4 is referenced in determining the duty rates applicable to goods under a TCO. The Explanatory Statement details a specific case where Boral Montoro Pty Limited successfully applied for a TCO for certain refractory cassette h shapes, resulting in these goods being subject to a zero rate of duty, effective from the date of application.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0806496 (section 269P(3)) require the Chief Executive Officer of Customs (CEO) to make a written order (a TCO) declaring that certain refractory cassette h shapes are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. This is because the CEO was satisfied that no substitutable goods were produced in Australia. The instrument specifies that the general rate of duty on these goods is 5%, whereas the rate of duty for the goods subject to the TCO is free. The CEO must decide whether an application for a TCO meets the core criteria under section 269C of the Customs Act 1901, which requires that, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business.
The obligations and requirements imposed by this Act on the parties it governs include the application process outlined in section 269F, where a person can apply to the CEO for a TCO in respect of goods, provided that the goods are not specified in section 269SJ. Once the CEO is satisfied that the application is valid and meets the core criteria, a written order is made under section 269P(3). The CEO must also publish a notice in the Gazette as soon as practicable after accepting a TCO application as a valid application (subsection 269K(1)), inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. In this case, the CEO did not receive any submissions in response to this invitation.
Under the Customs Act 1901, breaches of the requirements or obligations imposed by the Act may lead to civil or criminal consequences. However, the Explanatory Statement does not provide specific details about offences, penalties, or consequences for breach in relation to this particular Tariff Concession Instrument. It is important to note that while 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.