EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0833357
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.
Sa Fasteners Engineers Pty Ltd applied for a TCO in respect of certain cold drawn stainless steel wire on 30 September 2008.
Instrument
TCO No 0833357 was made on 19 December 2008. It declares that those certain cold drawn stainless steel wire 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. 0833357 is taken to have come into force on 30 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 Tariff Concession Instrument No. 0833357, enacted in 2008, was introduced to address the issue of applying tariff concessions on certain goods under the Customs Act 1901. This legislation was developed to provide relief to businesses by reducing the customs duty on specific goods, thereby encouraging trade and economic growth. The Act was enacted by the Australian Parliament and is overseen by the Chief Executive Officer of Customs, who is responsible for making Tariff Concession Orders (TCOs) based on applications from interested parties. The policy objective is to facilitate smoother trade operations by ensuring that certain goods are not subjected to prohibitive tariffs, thus aligning with broader economic policies aimed at enhancing trade efficiency and competitiveness.
The instrument specifically applies to certain cold drawn stainless steel wire, for which Sa Fasteners Engineers Pty Ltd applied for tariff concessions on 30 September 2008. After considering the application and ensuring that no substitutable goods were produced in Australia, the CEO issued TCO No. 0833357 on 19 December 2008, making the specified goods eligible for a duty-free rate under item 50 of Schedule 4 to the Customs Tariff Act 1995. This measure is intended to benefit importers by potentially allowing them to apply for duty refunds on goods imported since the effective date of the concession.
Scope and Application
The Customs Act 1901, under Part XVA, provides a framework for the application of Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs can grant lower rates of customs duty on specified goods. This legislative instrument applies to individuals or entities that meet the core criteria outlined in the Act, particularly those who can demonstrate that no substitutable goods are produced in Australia in the ordinary course of business. The scope of the Act is specifically tailored to goods that are the subject of a TCO application, ensuring that the concessional tariff rates are applied to those goods for which no domestic equivalent is produced. The geographic reach of the Act extends across the Commonwealth of Australia, with the application of TCOs uniformly governed under federal law. Notably, certain goods specified in section 269SJ of the Act are excluded from the application of TCOs. The Act may also extend or restrict its application through subordinate instruments, such as regulations or administrative notices, which further define terms and procedures within the scheme.
Key Provisions
The Customs Act 1901 (the Act) includes provisions that allow the Chief Executive Officer (CEO) of Customs to make Tariff Concession Orders (TCOs) under section 269F (1). These orders apply lower rates of customs duty to certain goods specified in the order. Section 269C sets out the core criteria that a TCO application must meet, specifically that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P (3) mandates that if the CEO is satisfied with the application, they must make a written order declaring that the specified goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
Entities or individuals seeking a TCO must apply to the CEO and ensure their application meets the core criteria outlined in the Act. The CEO must publish a notice in the Gazette inviting submissions from any interested parties, as per subsection 269K(1). In the case of TCO No. 0833357, the CEO made the order on 19 December 2008, declaring that certain cold drawn stainless steel wire are subject to the concession, with a free rate of duty instead of the general rate of 5%. The CEO did not receive any submissions opposing the order.
Failure to comply with the requirements of the Act could lead to civil or criminal consequences. While the Explanatory Statement does not specify offences or penalties, breaches of customs regulations generally can result in fines and imprisonment under the Customs Act 1901. Importers can apply for a refund of duty on goods imported since the TCO came into effect, without incurring any liabilities as per subsection 269S(1) and paragraph 126(1)(r) of the Regulations. The TCO does not disadvantage or impose liabilities on any person other than the Commonwealth.