EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0509437
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 tilting pad thrust bearings on 15 July 2005.
Instrument
TCO No 0509437 was made on 23 September 2005. It declares that those certain tilting pad thrust bearings 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. 0509437 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 Customs Act 1901, enacted by the Commonwealth Parliament, provides a framework for the imposition of customs duty on imported goods. To address the need for tariff concessions on specific imported goods that are not produced domestically, Part XVA of the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. The Tariff Concession Instrument No. 0509437, introduced to provide tariff concessions on certain tilting pad thrust bearings, exemplifies this process. This particular TCO was enacted to ensure that no substitutable goods were produced in Australia, thus justifying a lower rate of customs duty on these imported bearings. The policy objective is to support the import of goods that are not domestically produced, thereby potentially lowering costs for businesses and consumers while ensuring that the rights and liabilities of parties are not adversely affected by the introduction of the TCO.
Scope and Application
The Tariff Concession Instrument No. 0509437 under the Customs Act 1901 applies to Bluescope Steel Ltd’s application for tariff concessions on certain tilting pad thrust bearings, effective from 15 July 2005, the date the application was lodged. This instrument applies to the specified goods and is aimed at ensuring that the application meets the core criteria for tariff concessions as outlined in the Customs Act 1901. Specifically, the instrument applies to goods that are not substitutable by any goods produced in Australia in the ordinary course of business, thereby qualifying for a lower rate of customs duty as stipulated by the Customs Tariff Act 1995. The scope of the legislation is confined to the specific goods identified in the application and excludes any other goods not specified therein. The application of this Act is national in reach, administered by the Commonwealth through the CEO of Customs, and it does not extend to any goods listed in section 269SJ of the Act which are ineligible for tariff concessions. The CEO’s decision is final and binding, provided no submissions opposing the concession are received.
Key Provisions
The main operative sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCOs) include section 269F (application for a TCO), section 269C (core criteria for a TCO), section 269P(3) (making a TCO), and section 126 (refund of duty). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO determines that the application is valid and meets the core criteria specified in section 269C, they must make a written order (TCO) that declares the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, thus reducing the rate of customs duty. Section 126 allows importers to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force.
The Customs Act 1901 imposes certain obligations on parties involved in the process of applying for and granting a TCO. Firstly, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission. The CEO must then consider any submissions received. Additionally, the CEO must ensure that a TCO application meets the core criteria, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The Act also requires that a TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person in respect of anything done or omitted to be done before the date of registration.
Breaching the provisions of the Customs Act 1901 related to TCOs may lead to civil or criminal consequences, although specific offences and penalties are not detailed in the explanatory statement. The Act provides that a TCO is taken to have come into force on the day on which the application for the TCO was lodged. Any person who contravenes the provisions of the Act or the regulations may be subject to penalties, which could include fines or imprisonment, depending on the nature and severity of the breach. The explanatory statement does not provide maximum penalties for breaches, but these would typically be determined by the relevant legislation or case law. It is important for all parties involved to comply with the Act to avoid any potential legal repercussions.