EXPLANATORY STATEMENT
Tariff Concession Instrument No.0501737
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.
Bluescope Steel Limited applied for a TCO in respect of certain DC motors on 11 February 2005.
Instrument
TCO No 0501737 was made on 22 April 2005. It declares that those certain DC motors 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 3%.
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. 0501737 is taken to have come into force on 11 February 2005.
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. 0501737, enacted in 2005 under the Customs Act 1901, addresses the problem of ensuring that Australian businesses can import goods that are not produced domestically, thereby facilitating trade and competition within the local market. This instrument was introduced to provide a concessional tariff rate for certain DC motors, responding to an application from Bluescope Steel Limited, in line with the core criteria set out in the Act. The primary objective, as stated in the explanatory statement, is to support Australian businesses by reducing the customs duty on specific imported goods that do not have domestic substitutes. This approach aligns with the overarching policy of promoting economic efficiency and competitiveness within the Australian market. The instrument was enacted by the Chief Executive Officer of Customs, who is mandated to make such orders if the application meets the specified criteria, ensuring that the decision-making process is both transparent and responsive to market needs.
Scope and Application
The Tariff Concession Instrument No. 0501737 under the Customs Act 1901 applies to goods specified in the instrument, namely certain DC motors, which are to benefit from a lower rate of customs duty as determined by the instrument. This act applies to Bluescope Steel Limited, who applied for the tariff concession, and to any other entities importing these specific DC motors. The geographic and jurisdictional reach of the Act is national, as it is an instrument of the Commonwealth of Australia. The Act does not specify any exclusions, exemptions, or thresholds, but it is conditional on the core criteria being met, particularly that no substitutable goods are produced in Australia in the ordinary course of business. The application of the Act can be extended or restricted through subordinate instruments, such as regulations or further tariff concession instruments, which may provide additional details or modify the conditions under which the tariff concessions apply.
Key Provisions
The main operative sections of the Customs Act 1901 in this context are sections 269C, 269B, 269D, 269E, 269F, 269P, and 269S. Section 269F allows for the application to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) concerning goods. If the CEO determines that the application is valid and meets the core criteria outlined in section 269C, they are required to make a written order, which is a TCO, as per section 269P. This order applies a lower rate of customs duty to the specified goods. The core criteria include conditions such as no substitutable goods being produced in Australia in the ordinary course of business, with specific definitions provided in sections 269B, 269D, and 269E.
The Act imposes specific obligations on both the CEO and the applicants. The CEO must ensure that any TCO application is assessed against the core criteria and decide whether it meets these criteria. If the application is valid and meets the criteria, the CEO must make a TCO. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be made. On the other hand, the applicant must ensure their application is valid and includes all necessary information to meet the core criteria. They must also be prepared to respond to any objections or queries raised during the assessment process.
Failure to comply with the requirements of the Customs Act 1901 or the Tariff Concession Orders can result in various consequences. If a person knowingly makes a false statement or provides false information in an application for a TCO, they may be subject to penalties under section 276 of the Act, which includes fines or imprisonment. The maximum penalties can vary depending on the severity of the offence, with potential fines reaching up to $22,200 for individuals and $111,000 for corporations under the Crimes Act 1914. Additionally, any person who knowingly imports goods in breach of the Act or a TCO may face penalties, including fines and imprisonment, with the specifics depending on the nature and value of the goods involved.