EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0818981
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 16 July 2008.
Instrument
TCO No 0818981 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. 0818981 is taken to have come into force on 16 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. 0818981, made under the Customs Act 1901, was introduced to address the need for tariff concessions for specific imported goods where no substitutable goods are produced in Australia. This instrument was enacted to provide a mechanism by which the Chief Executive Officer of Customs can grant tariff concessions, thereby allowing for lower rates of customs duty on certain goods. The policy objective of this instrument is to facilitate the importation of goods that are not domestically produced, thus benefiting importers and potentially supporting industries that rely on imported materials. The instrument came into force on 16 July 2008, the date on which the application for the tariff concession was lodged, and does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on any person.
Scope and Application
The Tariff Concession Instrument No. 0818981 applies to certain hot rolled alloy steel coil and the process by which a Tariff Concession Order (TCO) may be made under the Customs Act 1901. This instrument was created to address an application from King Springworks Pty Ltd, who sought a TCO for these specific goods. The Act applies to any person or entity seeking a concession on customs duty for goods that are not being produced in Australia in the ordinary course of business. The geographic and jurisdictional reach of this Act is national, as it operates under the authority of the Commonwealth of Australia, and the application of the TCO is effective from the date the application was lodged. The Act does not disadvantage any person other than the Commonwealth and does not impose any liabilities on persons other than the Commonwealth. Furthermore, the Act may extend its application through subordinate instruments such as regulations, as evidenced by the ability for importers to apply for a refund of duty under the Customs (Tariff) Regulations 1994.
Key Provisions
The Tariff Concession Order (TCO) No. 0818981, made under the Customs Act 1901, primarily concerns the application of tariff concessions to certain hot rolled alloy steel coils. According to section 269F, an applicant may seek a TCO from the Chief Executive Officer of Customs (CEO) if the goods in question are not listed in section 269SJ, which identifies goods ineligible for tariff concessions. For the CEO to approve a TCO, section 269C stipulates that the application must meet the core criteria, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. The definitions of "goods produced in Australia," "ordinary course of business," and "substitutable goods" are outlined in sections 269D, 269E, and 269B, respectively.
The obligations imposed by this Act on the parties involved are primarily administrative. The CEO is required to assess the validity of the TCO application against the core criteria (section 269C) and, if satisfied, to make a written TCO (subsection 269P(3)). Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. In this case, no submissions were received. The TCO, once made, is effective from the date the application was lodged (subsection 269S(1)), meaning the concession applies retroactively from 16 July 2008.
The Act does not explicitly detail offences or penalties for non-compliance with the TCO provisions. However, the implications of breaching the terms of a TCO could include financial penalties, as the duty-free status of the goods is contingent upon adherence to the conditions set forth in the TCO. Failure to comply with the provisions could lead to the imposition of the standard duty rate, which is 5% for the specified hot rolled alloy steel coils, as opposed to the zero rate granted by the TCO. This could result in significant financial repercussions for importers who do not properly claim the tariff concession.