EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0944338
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.
Nubrick applied for a TCO in respect of certain refractory blocks and shapes on 23 November 2009.
Instrument
TCO No 0944338 was made on 26 February 2010. It declares that those certain refractory blocks and shapes 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. 0944338 is taken to have come into force on 23 November 2009.
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, establishes a framework for the regulation of imports and exports, including the imposition of customs duties. To address specific trade needs and facilitate economic growth, the Act allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs), which provide preferential rates of customs duty for certain goods. This mechanism was introduced to support businesses by reducing the cost of importing specific goods, thereby encouraging trade and investment. The Tariff Concession Instrument No. 0944338, issued under this authority, aims to provide a zero rate of duty for certain refractory blocks and shapes, recognising that these goods are not produced in Australia and thus do not have local substitutes. The policy objective is to ensure that businesses can access necessary imported goods at a reduced cost, which in turn supports their operations and competitiveness in the market.
Scope and Application
The Customs Act 1901, through Part XVA, establishes a scheme for the issuance of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs, which can lower the rate of customs duty on certain goods. The Act applies to any person or entity seeking to import goods eligible for a tariff concession, and it encompasses a range of industries where such goods might be used, provided they are not specified in section 269SJ of the Act, which lists ineligible goods. The application of this Act is national in scope, applying across Australia as a Commonwealth statute. The Act does not impose any liabilities or disadvantage existing rights of individuals or entities other than the Commonwealth, and it does not retroactively affect actions taken before the TCO's effective date. Additionally, the Act allows for the extension or restriction of its application through subordinate instruments, which are made under the authority of the Customs Act 1901. The TCO process involves an application to the CEO, assessment against core criteria, and potential public consultation, culminating in the issuance of a written order if the criteria are met.
Key Provisions
The key operative sections of the legislation concern the process and criteria for Tariff Concession Orders (TCOs) under the Customs Act 1901 (section 269F), the core criteria for a TCO (section 269C), and the definitions of terms such as "substitutable goods" and "ordinary course of business" (sections 269D, 269E, and 269P(3)). When an application for a TCO is submitted, the Chief Executive Officer of Customs (CEO) must assess whether it meets the core criteria, specifically ensuring that no substitutable goods are produced in Australia at the time the application was lodged (section 269C). If the CEO is satisfied that the application meets these criteria, they must issue a TCO (section 269P(3)). The TCO specifies the reduced rate of duty applicable to the goods in question.
The obligations imposed by the Act on the parties involved primarily concern the application and assessment process. The applicant must submit a valid TCO application that complies with the core criteria outlined in the Act. The CEO is obliged to review the application, assess whether it meets the core criteria, and if satisfied, make a TCO (section 269K(1)). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). In this case, the CEO did not receive any submissions.
The legislation also outlines the consequences for breaches of its provisions, though specific offences and penalties are not detailed in the explanatory statement. Typically, breaches of customs regulations can lead to civil and criminal penalties, including fines and imprisonment. However, the explanatory statement does not specify the maximum penalties applicable to breaches of the Tariff Concession Instrument No. 0944338. The primary focus of the legislation is on the procedural correctness of TCO applications and the CEO's responsibilities in assessing and publishing these orders.
Furthermore, the explanatory statement highlights that the TCO does not affect the rights of any person other than the Commonwealth as at the date of registration, ensuring that no person is disadvantaged or imposed with new liabilities as a result of the TCO (subsection 269S(1)). This provision is particularly beneficial to importers, who can apply for a refund of duty on goods imported since the TCO is deemed to have come into force. The rights of importers will be positively affected, as they will benefit from the reduced duty rate specified in the TCO.