EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510725
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 applied for a TCO in respect of certain Check or Non-Return Valves on 16 August 2005.
Instrument
TCO No 0510725 was made on 28 October 2005. It declares that those certain Check or Non-Return Valves 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 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. 0510725 is taken to have come into force on 16 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 Tariff Concession Instrument No. 0510725, enacted in 2005 under the Customs Act 1901, addresses the need to provide tariff concessions for specific goods that are not produced in Australia in the ordinary course of business, thereby ensuring fair competition and supporting Australian industry. The instrument was introduced to facilitate the application process for tariff concessions by allowing the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) for goods that meet the core criteria, such as the absence of substitutable goods produced in Australia. The policy objective is to assist businesses by reducing customs duty on imported goods where there is no domestic production, thus enhancing the competitiveness of Australian businesses in the global market. The instrument was made without any submissions opposing the concession, indicating broad acceptance of its utility and alignment with the legislative intent to support economic efficiency and industry growth.
Scope and Application
The Tariff Concession Instrument No. 0510725, made under the Customs Act 1901, applies to the goods specified in the instrument, namely certain Check or Non-Return Valves. This legislation enables the Chief Executive Officer of Customs to grant tariff concessions in cases where the goods in question are not substitutable by goods produced in Australia in the ordinary course of business. This concession results in a reduction of the customs duty from the general rate of 10% to 0% for these specific goods, effective from the date the application for the tariff concession was lodged, which was 16 August 2005. The application process requires consultation and notice to be given to the public, inviting submissions, though in this case, none were received. The scope of the legislation is limited to the tariff concessions for the named goods and does not extend to impose liabilities on any person, nor does it affect any pre-existing rights except to potentially benefit importers by allowing them to apply for a refund of duty paid on goods imported since the effective date of the concession.
Key Provisions
The main operative sections of the Customs Act 1901, specifically those referenced in this Explanatory Statement, revolve around the process of applying for and granting Tariff Concession Orders (TCOs). Under section 269F, any person can apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. The CEO must then determine if the application meets the core criteria outlined in sections 269C and 269SJ. If the application satisfies the core criteria, the CEO is required, under section 269P(3), to issue a written TCO, which effectively declares the specified goods to be subject to a particular item of Schedule 4 in the Customs Tariff Act 1995. For instance, in this case, TCO No. 0510725 was issued on 28 October 2005, reducing the duty on certain Check or Non-Return Valves from 10% to 0%.
The Act imposes certain obligations on both the applicant and the CEO. The applicant must ensure their application meets the core criteria, particularly that no substitutable goods are produced in Australia, as outlined in section 269C. The CEO has the duty to assess the application's validity and to publish a notice in the Gazette inviting submissions from any interested parties, as per subsection 269K(1). Upon satisfying themselves that the application meets the criteria and after no submissions are received against the application, the CEO must proceed to issue the TCO. Additionally, under subsection 269S(1), the TCO is deemed to come into force on the day the application was lodged, which in this case is 16 August 2005.
Failure to comply with the provisions of the Customs Act 1901 regarding TCOs can lead to various consequences. However, the explanatory statement does not detail specific offences or penalties for non-compliance with the Act itself. It does note that the TCO does not affect the rights of any person adversely and does not impose liabilities on any person. Importers, however, may benefit by applying for a refund of duty on goods imported since the TCO came into effect under paragraph 126(1)(r) of the Regulations. While the explanatory statement does not elaborate on penalties for breaching the Act, the inherent legal framework would typically involve civil or criminal penalties for non-compliance with statutory requirements, depending on the severity and intent behind the breach.