EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1100793
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.
Onesteel Limited applied for a TCO in respect of certain refractory bricks and shapes on 07 January 2011.
Instrument
TCO No 1100793 was made on 04 April 2011. It declares that those certain refractory bricks 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. 1100793 is taken to have come into force on 07 January 2011.
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 Commonwealth Parliament, provides a framework for the regulation of customs and excise in Australia. Among its provisions, Part XVA outlines the process for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which offer preferential rates of customs duty on specified goods. This mechanism was introduced to address the need for economic flexibility and competitive advantage for Australian industries by reducing the duty burden on certain goods, thereby encouraging trade and investment. Tariff Concession Instrument No. 1100793, made in 2011, is an example of this process, where Onesteel Limited successfully applied for a TCO for certain refractory bricks and shapes, resulting in a reduction of duty from 5% to free. This instrument exemplifies the Act's objective of facilitating trade by reducing barriers and enhancing the efficiency of customs processes.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which apply reduced rates of customs duty to specific goods. This mechanism is available to any person who applies under section 269F, provided the goods in question are not specified in section 269SJ of the Act as ineligible for TCOs. The process hinges on meeting the core criteria outlined in section 269C, which essentially requires that no substitutable goods are produced in Australia at the time of application. The scope of the Act thus applies to individuals and entities seeking tariff concessions on goods, with a specific focus on ensuring the absence of Australian-produced substitutable goods. Jurisdictionally, the Act operates under the Commonwealth, impacting the importation of goods across Australia, as it is the Customs Act that governs customs duties and related concessions. The Act’s application is further refined by the Customs Tariff Act 1995, which specifies the tariff items affected by TCOs. The explanatory statement clarifies that the TCO does not disadvantage or impose liabilities on any person for actions taken before its registration, thereby safeguarding existing rights and interests.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1100793 (section 269P(3)) require the Chief Executive Officer (CEO) of Customs to make a written order, or Tariff Concession Order (TCO), when satisfied that an application for a TCO meets the core criteria (section 269C). This involves ensuring that no substitutable goods were produced in Australia in the ordinary course of business at the time the application was lodged (sections 269B and 269E). The TCO declares that the specified goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, with the specified rate of duty, in this case, zero per cent for the certain refractory bricks and shapes.
The obligations imposed by the Act on the parties or entities it governs are primarily on the CEO of Customs, who must assess applications for TCOs against the criteria set out in section 269C. If the CEO determines that the application meets the core criteria, they are required to make a written TCO. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe there are reasons why the TCO should not be made (subsection 269K(1)). In this case, no submissions were received in response to the notice.
In terms of potential offences and penalties, the Act does not explicitly state civil or criminal penalties for breaches of the TCO provisions. However, the Act does provide a framework for handling applications and making orders. Non-compliance with the requirements of the Act, such as submitting false information in an application, could potentially lead to administrative or legal consequences. It is important to note that the Act ensures that the TCO does not affect the rights of a person, other than the Commonwealth, in a way that disadvantages them or imposes liabilities for actions taken before the TCO was registered (subsection 269S(1)). Therefore, there are no liabilities imposed by this particular TCO on any person.