EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0509436
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 radial pad bearing inserts on 15 July 2005.
Instrument
TCO No 0509436 was made on 23 September 2005. It declares that those certain radial pad bearing inserts 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 10%. 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. 0509436 is taken to have come into force on 15 July 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. 0509436 was enacted in 2005 under the Customs Act 1901, aiming to address the need for concessional tariff rates on specific imported goods. The instrument was introduced to provide tariff concessions for certain radial pad bearing inserts, effectively reducing their customs duty rate to zero. This was in response to an application by Bluescope Steel Ltd, who sought to benefit from lower customs duties on these specific goods by demonstrating that no substitutable goods were produced in Australia at the time of the application. The instrument was made by the Chief Executive Officer of Customs, who determined that the application met the core criteria stipulated in the Act, particularly that no substitutable goods were being produced in Australia in the ordinary course of business. This decision was made without any objections as no submissions were received in response to the published notice inviting public comment. The tariff concession became effective from the date the application was lodged, thereby ensuring that the rights of importers were advantageously affected from that date.
Scope and Application
The Tariff Concession Instrument No. 0509436 applies to entities or individuals seeking tariff concessions for specific goods under the Customs Act 1901, as administered by the Chief Executive Officer of Customs. This legislation specifically targets the application of tariff concessions on goods not produced in Australia in the ordinary course of business, thereby facilitating lower customs duties on such imported items. The instrument extends its reach across the Commonwealth of Australia, aligning with the national scope of the Customs Act 1901. Notably, the Act does not apply to goods specified in section 269SJ, which outlines those ineligible for tariff concessions. Additionally, the instrument does not affect the rights or impose liabilities on persons other than the Commonwealth concerning actions taken prior to its registration, ensuring that importers can benefit from duty refunds for goods imported since the TCO's effective date.
Key Provisions
The main operative sections of the Customs Act 1901, particularly under Part XVA, provide the framework for the creation and enforcement of Tariff Concession Orders (TCOs) (sections 269C, 269F, 269K, 269P, 269S, 269SJ). Section 269F allows an application to be made to the Chief Executive Officer (CEO) of Customs for a TCO concerning specific goods. If the CEO is satisfied that the application is valid and meets the core criteria, such as the absence of substitutable goods produced in Australia, they are required to make a TCO (section 269P(3)). This TCO results in a lower rate of customs duty for the specified goods. In the case of Tariff Concession Instrument No. 0509436, the CEO made a TCO for certain radial pad bearing inserts, reducing the duty from 10% to free.
The obligations imposed by the Act on the parties involved, particularly the CEO, include ensuring that TCO applications are valid and meet the specified criteria. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made, and consider these submissions before making a decision (section 269K(1)). In this instance, the CEO did not receive any submissions opposing the TCO. Additionally, the Act mandates that TCOs should not affect the rights of any person adversely as at the date of registration, ensuring that they do not impose liabilities on any person for actions taken before the registration date (section 269S(1)).
The consequences for breach of the Act’s provisions are not explicitly detailed in the explanatory statement. However, non-compliance with the Act’s requirements or failure to adhere to the conditions set by a TCO could potentially lead to civil or criminal penalties, depending on the nature and severity of the breach. Given the importance of the TCO scheme in managing customs duties, any significant deviations from the prescribed procedures could invite regulatory scrutiny and enforcement actions. The maximum penalties for breaches of the Customs Act are not specified in this particular explanatory statement but could range from fines to imprisonment, depending on the offence under the Act.