EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0504544
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 0504544 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. 0504544 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 Tariff Concession Instrument No. 0504544, enacted in 2005, is an instrument under the Customs Act 1901, which facilitates the application of tariff concessions for specific goods through the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation was introduced to address the need for streamlined processes to provide tariff relief for certain imported goods that do not have Australian-made substitutes. This mechanism ensures that Australian industries are protected from unfair competition while allowing for the importation of necessary goods at a reduced duty rate. The Tariff Concession Instrument No. 0504544 specifically pertains to Bluescope Steel Ltd’s application for tariff concessions on certain circuit breakers, aiming to eliminate customs duty on these specific goods, thereby benefiting importers. The instrument was made following consultation requirements, including a public notice inviting objections, none of which were received, and it came into effect on the date the application was lodged.
Scope and Application
The Tariff Concession Instrument No. 0504544 under the Customs Act 1901 applies to any entity that is eligible to make an application for a Tariff Concession Order (TCO) regarding goods, provided that the application meets the core criteria outlined in the Act. Specifically, the TCO process is relevant to goods that are not produced in Australia in the ordinary course of business and for which substitutable goods are not available domestically. This instrument allows for a lower rate of customs duty on specified goods, facilitating trade and potentially benefiting importers by enabling them to claim a refund of duty on such goods imported since the effective date of the TCO. The geographic and jurisdictional reach of this Act is national, applying throughout Australia, and it is administered by the Chief Executive Officer of Customs (CEO) as per the provisions set out in the Customs Act 1901. The application and effects of the TCO are governed by the Customs Act and the Customs Tariff Act 1995, with the commencement of the TCO occurring on the date the application is lodged. The instrument does not impose any liabilities on any person and does not disadvantage anyone with rights as at the date of registration.
Key Provisions
The Customs Act 1901, under Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (section 269F). A TCO allows for a lower rate of customs duty to be applied to certain goods. Specifically, under section 269C, a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. For the purposes of this provision, 'substitutable goods' refers to those produced in Australia that can be used in a manner similar to the goods in question (section 269D, 269E, 269B).
The obligations imposed by the Act on the CEO include assessing the validity of TCO applications and ensuring that they meet the core criteria specified in section 269C. The CEO must also publish a notice in the Gazette inviting any interested parties to submit their views on the application as soon as practicable after accepting it as valid (subsection 269K(1)). Once the CEO is satisfied that the application meets the criteria, they must make a written order (TCO) that specifies the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applicable to the goods in question (subsection 269P(3)).
In the case of TCO No. 0504544, the CEO determined that the application met the core criteria and issued the order on 2 September 2005. The TCO applies to certain circuit breakers and declares that they are subject to item 50 of Schedule 4 to the Tariff, with a duty rate of free, compared to the general rate of 5%. The TCO came into force on 19 April 2005, the day the application was lodged (subsection 269S(1)). This means that the rights of importers will be beneficially affected, as they can apply for a refund of duty on goods imported since the TCO's effective date (paragraph 126(1)(r) of the Regulations). Importantly, the TCO does not affect the rights of any person (other than the Commonwealth) to the disadvantage of that person or impose any liabilities on any person in respect of anything done or omitted before the date of registration.