EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0837701
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.
Austress Freyssinet applied for a TCO in respect of certain steel bridge billets on 29 October 2008.
Instrument
TCO No 0837701 was made on 23 January 2009. It declares that those certain steel bridge billets 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. 0837701 is taken to have come into force on 29 October 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 Australian Parliament, provides a framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs). These orders, which are introduced to address the problem of ensuring that Australian industries are not disadvantaged by the imposition of customs duties on imported goods that are not being produced locally, allow for a lower rate of customs duty on specified goods. The Tariff Concession Instrument No. 0837701 was introduced under this Act to provide tariff concessions for certain steel bridge billets, effective from 29 October 2008, the date the application was lodged. The policy objective is to ensure that Australian industries are not put at a competitive disadvantage by providing tariff relief where locally-produced substitutable goods do not exist.
Scope and Application
The Customs Act 1901, as outlined in Tariff Concession Instrument No. 0837701, provides a framework for the Chief Executive Officer (CEO) of Customs to grant Tariff Concession Orders (TCO) for specific goods, thereby reducing the customs duty on these goods. This instrument applies to entities or individuals who have applied for a TCO for certain goods, ensuring that the application adheres to the core criteria set forth in the Act. The TCO mechanism is specifically designed for goods that are not produced in Australia in the ordinary course of business and have no substitutable goods domestically available. The scope of the Act encompasses the entire Commonwealth of Australia, and its provisions are applicable nationally. The application of the TCO is limited to goods specified in the instrument and does not extend to those goods that are expressly excluded under section 269SJ of the Act. Subordinate instruments may further define or refine the application of the TCO provisions, thereby extending or restricting the scope as necessary.
Key Provisions
The main operative sections of the Customs Act 1901, particularly Part XVA, establish a framework for the creation of Tariff Concession Orders (TCOs) through section 269F, which allows a person to apply to the Chief Executive Officer of Customs (CEO) for such an order. Section 269C outlines the core criteria that must be met for an application to be successful, namely that no substitutable goods are produced in Australia on the day the application is lodged. The CEO is required to make a written TCO if these criteria are satisfied, as detailed in section 269P(3). In this case, Tariff Concession Order No. 0837701 was made on 23 January 2009, applying a zero duty rate on certain steel bridge billets from the date of the application, 29 October 2008.
The Act imposes certain obligations on the parties involved in the TCO process. The CEO must ensure that the application does not concern goods specified in section 269SJ, which cannot be subject to a TCO. If the application passes this initial check, the CEO must determine whether it meets the core criteria set out in section 269C. Should the application be approved, the CEO is mandated to issue a written TCO. Additionally, as per section 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit any objections or submissions against the TCO. In the case of TCO No. 0837701, no submissions were received, facilitating the smooth implementation of the concession.
In terms of the consequences for breach, the Act does not explicitly outline specific offences, penalties, or civil/criminal consequences for non-compliance with the TCO provisions. However, the implications of failing to adhere to the requirements could involve the nullification of the TCO and a reversion to the standard duty rates. For instance, if it were found that substitutable goods were indeed produced in Australia on the day the application was lodged, the TCO could be revoked, and the applicant might face the standard duty rates applicable to the goods. While the Act does not specify maximum penalties, the ramifications of such non-compliance could include financial losses for the applicant due to higher customs duties and potential reputational damage.
The Act ensures that the implementation of TCOs does not adversely affect the rights of any person, except the Commonwealth, in respect of actions taken before the TCO's effective date. Specifically, section 126(1)(r) of the Regulations allows importers to apply for a refund of duty paid on goods imported since the TCO's effective date. This provision is designed to protect importers from any negative impacts due to the retroactive application of the TCO, thus maintaining fairness and legal certainty within the trade framework.