EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510010
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 Skids and/or Posts on 1 August 2005.
Instrument
TCO No 0510010 was made on 21 October 2005. It declares that those certain Skids and/or Posts 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 0%.
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. 0510010 is taken to have come into force on 1 August 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 was enacted to facilitate the regulation of international trade through the imposition of customs duties and other measures. Part XVA of this Act introduces a scheme where Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO), allowing for reduced customs duty rates on specified goods. Enacted by the Parliament of Australia, the objective of this legislative framework is to encourage the importation of goods that are not domestically produced, thereby supporting industries and consumers by reducing costs. The CEO must ensure that an application for a TCO meets core criteria, such as the absence of substitutable goods produced in Australia, before proceeding with the concession. This mechanism aims to balance economic incentives for importers with the broader goals of domestic industry protection and revenue generation for the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0510010 applies to goods specified in the instrument, namely certain Skids and/or Posts, which are subject to a Tariff Concession Order (TCO) under Part XVA of the Customs Act 1901. This legislation allows for the application of a lower rate of customs duty on goods that meet certain criteria, as determined by the Chief Executive Officer of Customs (CEO). The scope of the Act extends to any person or entity seeking a TCO for goods that are not produced in Australia in the ordinary course of business, and it applies nationally as per the provisions of the Customs Act 1901. The geographic reach of this Act is Commonwealth, meaning it applies across Australia. The Act excludes goods specified in section 269SJ of the Customs Act 1901, which outlines those goods that cannot be subject to a TCO. The Act may also extend its application through subordinate instruments, which provide further detail on the implementation and administration of tariff concessions. This particular TCO, effective from 1 August 2005, reduces the duty on the specified goods from 5% to 0%, directly benefiting importers of these goods.
Key Provisions
The Tariff Concession Instrument No. 0510010, under the Customs Act 1901, introduces a tariff concession order (TCO) for certain Skids and/or Posts, effective from 1 August 2005. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. The CEO is mandated to make a written order declaring the goods subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, provided the application meets the core criteria set out in sections 269C and 269SJ of the Act. For the Skids and/or Posts in question, the CEO confirmed that no substitutable goods were produced in Australia, thus satisfying the core criteria. Consequently, the CEO issued TCO No. 0510010, specifying that the rate of duty for these goods is 0% instead of the general rate of 5%.
The obligations under the Act primarily involve the CEO ensuring that applications for TCOs meet the statutory criteria before issuing an order. For Bluescope Steel Ltd, this involved applying for the TCO, with the CEO required to verify the absence of substitutable goods in Australia and the appropriateness of the concession. Subsection 269K(1) also mandates the CEO to publish a notice in the Gazette inviting any interested parties to submit objections to the TCO. In this case, no submissions were received, facilitating the issuance of the TCO.
In terms of potential consequences for breaches, while the Act does not explicitly outline penalties for non-compliance with TCOs, general provisions within the Customs Act 1901 and related regulations could apply. These might include fines or other civil penalties for incorrect claims or misrepresentations regarding the goods' eligibility for tariff concessions. Moreover, the Act ensures that the TCO does not affect the rights of any person as at the date of registration, thereby protecting parties from any disadvantage or liabilities incurred before the TCO's effective date.