EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0818899
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 coil on 15 July 2008.
Instrument
TCO No 0818899 was made on 10 October 2008. It declares that those certain hot rolled alloy steel coil 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. 0818899 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 Customs Act 1901 was enacted by the Australian Parliament to establish a regulatory framework governing customs and excise in Australia. One of the mechanisms introduced by the Act is the Tariff Concession Order (TCO) scheme, under which the Chief Executive Officer of Customs can grant concessions on customs duty rates for specific goods, provided certain criteria are met. The primary problem or gap this scheme addresses is the potential economic disadvantage faced by Australian businesses if they cannot compete with imported goods due to higher customs duty rates, particularly when no domestic substitutes exist. This is aimed at fostering fair trade practices and supporting local industries. Instrument No. 0818899, introduced under this Act, specifically concerns a concession on the duty for certain hot rolled alloy steel coil, reducing the duty rate from 5% to free, effective from 15 July 2008. The policy objective here is to ensure that Australian importers of these goods benefit from the reduced duty rate, thereby promoting economic efficiency and fairness in trade.
Scope and Application
The Customs Act 1901, as amended and supplemented by Tariff Concession Instrument No. 0818899, applies to individuals and entities seeking tariff concessions for specific goods. This legislation facilitates the application process for Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, who is empowered to grant concessions for goods not produced in Australia and for which no substitutable goods are available. The geographic reach of this legislation is national, operating under the framework of Commonwealth law, which extends across all states and territories of Australia. The Act specifically excludes certain goods as outlined in section 269SJ, and the application process is governed by the core criteria in section 269C, ensuring that the goods in question are not domestically produced and have no substitutable alternatives. The instrument in question, TCO No. 0818899, was made on 10 October 2008, and it applies to specific hot rolled alloy steel coil, reducing the duty rate from 5% to free. The instrument became effective from 15 July 2008, the date of the application, and does not impose any liabilities on persons other than the Commonwealth, thereby protecting the rights of existing parties as per subsection 269S(1).
Key Provisions
The main operative sections of this legislation include section 269C, which provides the criteria for the consideration of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), and section 269F, which outlines the process for applying for a TCO. According to section 269C, a TCO application will meet the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269F allows a person to apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is valid and 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 applies.
The Act imposes several obligations on the parties involved in the TCO process. The CEO is required to assess whether a TCO application meets the core criteria outlined in section 269C and to make a written order if the application is valid and meets these criteria. The CEO must also publish a notice in the Gazette as soon as practicable after accepting a TCO application as a valid application, inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission. The CEO must take into account any submissions received before making a final decision on the application. Additionally, the CEO must ensure that the TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities in respect of anything done or omitted to be done before the date of registration.
The legislation does not explicitly outline specific offences, penalties, or civil or criminal consequences for breach. However, the process for applying for and making a TCO is strictly regulated, and failure to comply with the requirements of the Act or the regulations could potentially lead to legal consequences. For instance, if the CEO does not follow the prescribed process for making a TCO or fails to consider valid submissions, this could potentially lead to legal challenges or disputes. Similarly, if an importer or other party fails to comply with the conditions of the TCO, this could potentially lead to penalties or other legal consequences. However, the specific penalties or consequences would depend on the nature and severity of the breach and would need to be determined on a case-by-case basis.