EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0504543
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 Ltd applied for a TCO in respect of certain circuit breakers on 19 April 2005.
Instrument
TCO No 0504543 was made on 2 September 2005. It declares that those certain circuit breakers 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. 0504543 is taken to have come into force on 19 April 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 Customs Act 1901, enacted by the Parliament of Australia, provides a framework for the administration of customs and excise. Specifically, Part XVA of this Act introduces a scheme for Tariff Concession Orders (TCOs) which can be made by the Chief Executive Officer of Customs to apply lower rates of customs duty on certain goods. The Tariff Concession Instrument No. 0504543, made under this scheme, was introduced to address the specific need to provide tariff concessions for certain circuit breakers, as applied for by Bluescope Steel Ltd. The policy objective here is to ensure that certain goods, which are not substitutable by Australian-produced alternatives, benefit from reduced customs duties, thereby facilitating their import and potentially aiding related industries or sectors in Australia. The instrument was made effective from the date of the application, 19 April 2005, and does not retroactively affect the rights or liabilities of any parties other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0504543 under the Customs Act 1901 applies to entities seeking tariff concessions on specific goods, with the primary focus being on businesses and importers who are directly affected by customs duties. The Act allows for applications to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) that would reduce the customs duty on certain goods. The geographic and jurisdictional reach of this Act is federal, as it falls under the Commonwealth of Australia. The TCO applies to goods that are not produced in Australia and do not have substitutable goods produced domestically, as outlined in sections 269C and 269SJ of the Customs Act 1901. The Act does not specify exclusions, but it does exclude certain goods from the concessions based on the criteria for substitutable goods. The application and scope of the Act can be further extended or restricted through subordinate instruments, such as regulations and notices published under the Customs Act 1901.
Key Provisions
The Customs Act 1901, as supplemented by the Tariff Concession Instrument No. 0504543, facilitates the creation of Tariff Concession Orders (TCOs) that allow for lower rates of customs duty on specified goods. Under section 269F, an application can be made to the Chief Executive Officer of Customs (CEO) for a TCO if certain conditions are met. Section 269C stipulates that an application is eligible if no substitutable goods were produced in Australia on the day the application was lodged, as per section 269P(3) of the Act. If the CEO is satisfied with the application and that it meets the core criteria, they must make a written order declaring that the goods are subject to a prescribed rate of duty in Schedule 4 of the Customs Tariff Act 1995.
The CEO has specific obligations under this legislation, including the requirement to publish a notice in the Gazette inviting any interested parties to submit objections to the proposed TCO within a reasonable timeframe. Following the publication of such a notice, the CEO must consider any submissions received and make a determination based on the evidence presented. In this instance, as per the Explanatory Statement, no submissions were received in response to the notice published for TCO No. 0504543. Once a TCO is made, it comes into effect on the date the application was lodged, as outlined in section 269S(1) of the Act.
The Act imposes penalties for non-compliance with the conditions and obligations set out in the TCO. If a party fails to comply with the terms of the TCO, they may be subject to civil or criminal penalties. Under section 274 of the Customs Act 1901, an offender can be fined up to 10,000 penalty units or imprisonment for up to five years, or both, for serious breaches. Additionally, section 275 of the Act provides that any person who makes a false or misleading statement in an application for a TCO is liable to a fine of up to 1,100 penalty units. These penalties serve as a deterrent against non-compliance and ensure that the scheme operates fairly and effectively.