EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0830062
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.
Baulderstone Hornibrook Pty Ltd applied for a TCO in respect of certain steel framework on 08 September 2008.
Instrument
TCO No 0830062 was made on 28 November 2008. It declares that those certain steel framework 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. 0830062 is taken to have come into force on 08 September 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 Parliament of Australia, provides a framework for administering customs and excise duties. The Act includes a scheme under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. The TCOs grant lower rates of customs duty on specified goods, provided certain criteria are met. This mechanism was introduced to address the problem of ensuring that Australian industries can access essential goods at reduced costs without compromising revenue collection or the competitive landscape. Tariff Concession Instrument No. 0830062, made in 2008, exemplifies this process by granting a tariff concession on certain steel framework, reducing the duty rate from 5% to free, thereby supporting the policy objective of facilitating trade and industry efficiency by providing access to competitively priced imported goods.
Scope and Application
The Customs Act 1901, under Part XVA, provides a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This legislation applies to any person who applies for a TCO in respect of goods, provided that the goods are not specified in section 269SJ of the Act which outlines those goods that cannot be subject to a TCO. The application process requires the CEO to assess whether the application meets the core criteria, specifically whether no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. If the CEO determines that the application meets these criteria, they must issue a written TCO, effectively reducing or eliminating customs duty on the specified goods. The TCO mechanism is designed to benefit importers by potentially reducing their duty obligations on specified goods, as long as the goods do not have Australian-made substitutes and meet the specified conditions. The application and issuance of TCOs are subject to publication in the Gazette to allow for public submissions, although in the case of TCO No. 0830062, no submissions were received. The TCO comes into force on the date the application is lodged, retroactively affecting the rights of importers who may apply for refunds on duties paid prior to the TCO’s effective date.
Key Provisions
The Tariff Concession Instrument No. 0830062 (the Instrument) under the Customs Act 1901 (the Act) primarily concerns the concession of customs duty for certain steel frameworks, as applied for by Bauderstone Hornibrook Pty Ltd on 08 September 2008. Pursuant to section 269F of the Act, the Chief Executive Officer of Customs (CEO) assessed the application and subsequently determined that the steel framework met the core criteria outlined in section 269C of the Act, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the date of application. The CEO's satisfaction with these criteria led to the issuance of the Instrument, declaring that the steel frameworks are subject to a zero rate of customs duty, as opposed to the general rate of 5% stipulated in the Customs Tariff Act 1995.
The obligations imposed by the Instrument on the parties involved are relatively straightforward. The CEO, as the authority responsible for granting Tariff Concession Orders (TCOs), must ensure that the application for a TCO meets the specified criteria. This involves verifying that no substitutable goods were produced in Australia on the date of the application and making a written order if satisfied. Bauderstone Hornibrook Pty Ltd, the applicant, must provide all necessary information and evidence to support the application. Importers of the steel frameworks, who are the primary beneficiaries of this concession, must ensure that the goods fall under the category specified in the Instrument to claim any applicable refund of duties as per the Customs Regulations.
The Act and accompanying regulations do not specify any offences or penalties for breaches related to the TCOs. However, incorrect claims for duty refunds or misrepresentation of goods to benefit from the concession could potentially lead to civil or criminal consequences under other sections of the Customs Act. While the Instrument itself does not detail specific penalties, general provisions of the Customs Act may impose fines and other sanctions for non-compliance with customs regulations. The severity of these penalties would depend on the specific breach and relevant sections of the Act.