EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0504553
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 breaker parts on 19 April 2005.
Instrument
TCO No 0504553 was made on 2 September 2005. It declares that those certain circuit breaker parts 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. 0504553 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. 0504553, enacted in 2005, is a legislative instrument under the Customs Act 1901, which aims to provide tariff concessions for specific goods. This instrument was introduced to address the need for reduced customs duty rates on certain goods, in this case, circuit breaker parts, to benefit importers and potentially stimulate market activity by making such goods more competitively priced. The instrument was enacted by the Chief Executive Officer of Customs, who is mandated by the Customs Act to make such decisions if certain criteria are met, specifically, that no substitutable goods are produced in Australia. The policy objective is to ensure that tariff concessions are granted appropriately, without disadvantaging any person or imposing liabilities on individuals other than the Commonwealth.
The Tariff Concession Instrument was published in the Gazette with an invitation for submissions, although none were received. It came into effect on the date the application was lodged, 19 April 2005, and does not affect any pre-existing rights or liabilities. Importers, however, stand to benefit from this instrument as they can apply for a refund of duty on the goods imported since the commencement date of the tariff concession.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) for certain goods, thereby granting them a lower rate of customs duty. This process applies to any person who submits an application to the CEO, provided the goods in question are not those specified in section 269SJ of the Act, which are ineligible for tariff concessions. The application must meet the core criteria outlined in section 269C, ensuring that on the date of application, no substitutable goods were produced in Australia in the ordinary course of business. This legislation extends across the Commonwealth of Australia and is applicable to any entity or individual involved in the importation of goods that seek tariff concessions. Notably, the Act does not extend its application to those goods specified as ineligible under section 269SJ, and it ensures that the rights of non-Commonwealth persons are not adversely affected by the concessions granted. Subordinate instruments may further detail the specific processes and criteria for TCO applications, but the primary application remains within the scope of the Customs Act 1901.
Key Provisions
The primary operative sections of the Customs Act 1901, as applied in Tariff Concession Instrument No. 0504553, include sections 269C, 269F, 269P, and 269S (subsection 269S(1)). Section 269F allows for an application to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of specific goods. Section 269C specifies the core criteria that an application must meet, including the condition that no substitutable goods were produced in Australia on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, section 269P mandates the CEO to issue a written TCO. Finally, subsection 269S(1) states that a TCO comes into force on the day the application was lodged, which for this instrument, was 19 April 2005.
The Act imposes several obligations and requirements on both the applicant and the CEO. The applicant must ensure that the application is not in respect of goods specified in section 269SJ of the Act, which are ineligible for a TCO. The CEO, on receiving a valid application, must assess whether it meets the core criteria outlined in section 269C. This involves verifying that no substitutable goods were produced in Australia on the day the application was lodged, as defined by sections 269D and 269E. If the application satisfies these conditions, the CEO is required to issue a written TCO under section 269P, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applicable to the goods. Additionally, as per subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made, although no submissions were received in this case.
The Customs Act 1901 includes provisions for offences, penalties, and consequences for breaches related to the issuance and application of TCOs. Although the explanatory statement does not detail specific penalties, it is reasonable to infer that breaches of the Act's provisions could lead to enforcement actions under general customs laws, which may include fines and other civil or criminal penalties. The precise penalties would depend on the nature and severity of the breach, as well as the specific provisions of the Act and related regulations that are contravened.
The Tariff Concession Instrument No. 0504553 does not impose any liabilities on any person, and it does not affect the rights of persons other than the Commonwealth as at the date of registration. However, it does confer benefits on importers of the specified goods by allowing them to apply for a refund of duty on goods imported since the TCO came into force. This is in line with the protections and benefits outlined in the Act, ensuring that the rights of individuals and entities are preserved and that the application of the TCO does not unjustly disadvantage anyone.