EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1118281
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 Ltd applied for a TCO in respect of certain refractory bricks and shapes on 08 June 2011.
Instrument
TCO No 1118281 was made on 22 August 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. 1118281 is taken to have come into force on 08 June 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 the legislative framework for managing customs duties in Australia. One of the mechanisms under this Act is the establishment of Tariff Concession Orders (TCOs), which can reduce the duty payable on specific imported goods. The explanatory statement for Tariff Concession Instrument No. 1118281 clarifies the process and application of a TCO for certain refractory bricks and shapes. Enacted on 22 August 2011, this instrument responds to an application by OneSteel Ltd for tariff concessions on these goods, which were not being produced in Australia at the time. The instrument was designed to ensure that the application met the core criteria under section 269C of the Act, confirming that no substitutable goods were produced in Australia. The policy objective is to facilitate the import of goods that are not domestically produced, thereby supporting industries that rely on imported materials without domestic alternatives. This TCO effectively reduces the general duty rate from 5% to free, benefiting importers who can now apply for duty refunds on goods imported since the effective date of 8 June 2011.
Scope and Application
The Customs Act 1901, through the Tariff Concession Instrument No. 1118281, facilitates the application of tariff concessions on specified goods by way of a Tariff Concession Order (TCO). This legislation applies to any person or entity seeking a lower rate of customs duty on goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. The geographic scope of this Act is national, applying across all states and territories within Australia. The instrument was made following an application by OneSteel Ltd for certain refractory bricks and shapes, and it specifies that these goods are subject to a free rate of duty as opposed to the general rate of 5%. The Act includes a provision for public consultation, although no submissions were received in response to the published notice inviting objections to the TCO. The commencement of this TCO is deemed to be effective from the date the application was lodged, which in this case was 08 June 2011. Notably, the TCO does not disadvantage any person or impose new liabilities, and it allows for potential refunds of duty for importers of the specified goods.
Key Provisions
The primary operative sections of the Customs Act 1901, specifically under Part XVA, facilitate the making of Tariff Concession Orders (TCO) by the Chief Executive Officer (CEO) of Customs. Section 269F allows a person to apply to the CEO for a TCO in respect of goods, provided the goods are not specified in section 269SJ, which lists those goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria outlined in section 269C, they must make a written order declaring that the goods in question are subject to a lower rate of duty as specified in Schedule 4 to the Customs Tariff Act 1995. For example, TCO No. 1118281, made on 22 August 2011, declared that certain refractory bricks and shapes would be subject to a free rate of duty, down from the general rate of 5%.
The obligations and requirements imposed by the Act on the parties involved primarily concern the application process and the criteria for approving TCOs. The CEO must ensure that the application is valid and not in respect of goods listed in section 269SJ. Furthermore, under section 269C, the CEO must determine if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Substitutable goods are defined as those produced in Australia that can be put to a use corresponding to the goods in question. If the CEO is satisfied that these criteria are met, they must make a TCO. Additionally, under section 269K, the CEO is required to publish a notice in the Gazette inviting submissions from any person who might oppose the TCO, although in this case, no submissions were received.
The Customs Act 1901 also outlines various consequences for breaches of its provisions. However, the explanatory statement does not specify any offences, penalties, or civil/criminal consequences directly related to the making of TCOs. Nonetheless, any general breach of the Customs Act could result in penalties under other sections of the Act, such as fines or imprisonment, depending on the severity of the breach. The specifics of such penalties are not detailed in the explanatory statement but would be governed by other relevant sections of the Customs Act and associated regulations.