EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0818895
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.
King Springworks Pty Ltd applied for a TCO in respect of certain hot rolled alloy steel bars on 15 July 2008.
Instrument
TCO No 0818895 was made on 10 October 2008. It declares that those certain hot rolled alloy steel bars 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. 0818895 is taken to have come into force on 15 July 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. 0818895, enacted under the Customs Act 1901, addresses the problem of ensuring tariff concessions for goods that are not produced domestically. This legislative instrument facilitates the application of a lower rate of customs duty on specified imported goods by allowing the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) when certain conditions are met. The core criteria for issuing a TCO include the absence of substitutable goods produced in Australia, ensuring that the concession benefits industries where local production is not viable. The policy objective behind this legislation is to promote fair trade practices by providing relief to industries that rely on imported goods that are not domestically manufactured.
The instrument was introduced following an application by King Springworks Pty Ltd for tariff concessions on certain hot rolled alloy steel bars, which were granted due to the lack of local production of substitutable goods. This specific TCO, effective from 15 July 2008, provides a zero percent duty rate for these imported steel bars, thereby reducing costs for importers. The instrument was published in the Gazette, inviting submissions from the public, but none were received, leading to its formal enactment. This legislative process underscores the importance of balancing trade benefits and local industry protection within Australia’s customs framework.
Scope and Application
The Customs Act 1901, specifically Part XVA, outlines the framework for Tariff Concession Orders (TCOs) which are issued by the Chief Executive Officer of Customs. These orders apply to goods for which a lower rate of customs duty is specified, provided that the application meets the core criteria set out in the Act. The Act applies to individuals and entities seeking tariff concessions for specific goods, with the primary focus being on those goods not produced in Australia and for which no substitutable goods are available domestically. The geographical reach of this legislation is national, as it operates under the auspices of the Commonwealth of Australia. The Act does not apply to goods specified in section 269SJ, which lists those that cannot be subject to a TCO. The application of the Act may be extended or restricted through subordinate instruments, although the primary focus remains on the specific conditions outlined in the Customs Act 1901. This legislation ensures that the rights of importers are positively impacted by providing potential duty refunds for imports since the effective date of the TCO, without imposing any liabilities on entities other than the Commonwealth.
Key Provisions
The Tariff Concession Instrument No. 0818895, under the Customs Act 1901 (the Act), pertains to Tariff Concession Orders (TCOs) that can be issued by the Chief Executive Officer of Customs (the CEO) for specific goods, thereby applying a lower rate of customs duty. Section 269F of the Act allows for applications to be made to the CEO for a TCO in respect of goods, provided they are not specified in section 269SJ, which lists goods ineligible for a TCO. For an application to be considered, it must meet the core criteria outlined in section 269C, which requires that, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for key terms such as 'substitutable goods', 'ordinary course of business', and 'goods produced in Australia' are provided in sections 269B, 269D, and 269E of the Act.
The obligations under this legislation for the parties involved include the necessity for applicants to ensure their goods meet the eligibility criteria for a TCO, as outlined in section 269C. The CEO is obliged to evaluate the application against these criteria and make a decision based on the information provided. If the CEO is satisfied that the application meets the core criteria, they are mandated by section 269P(3) to issue a written order, or TCO, specifying the applicable tariff concession. Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit objections to the TCO within a specified period, although in this case, no submissions were received.
In terms of penalties and consequences for breaches of this legislation, the Act does not explicitly outline specific offences or penalties related to the application or issuance of TCOs. However, any general contraventions of the Customs Act 1901 could lead to enforcement actions, which may include civil or criminal penalties. The maximum penalties for breaches of the Customs Act can vary depending on the nature and severity of the offence, but they can include substantial fines and, in some cases, imprisonment. The specific consequences would be determined by the relevant courts and regulatory authorities in accordance with the broader provisions of the Customs Act and related legislation.