EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510889
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 Recirculators and/or Heat Exchangers on 16 August 2005.
Instrument
TCO No 0510889 was made on 28 October 2005. It declares that those certain Recirculators and/or Heat Exchangers 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. 0510889 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. 0510889 was enacted under the Customs Act 1901 to provide tariff concessions for specific goods, namely certain Recirculators and Heat Exchangers, which are subject to a lower rate of customs duty. This instrument was introduced to address the need for tariff concessions in cases where no substitutable goods are produced in Australia, thus ensuring that Australian industries are not disadvantaged. The instrument was made by the Chief Executive Officer of Customs in response to an application by Bluescope Steel on 16 August 2005, and it came into force on the same date. The policy objective is to provide tariff relief to importers of these goods by reducing the duty rate from 5% to 0%, thereby encouraging trade and supporting Australian businesses.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders apply to goods that are subject to lower rates of customs duty. An application for a TCO can be made by any person, provided the goods in question are not specified in section 269SJ of the Act, which lists goods that are ineligible for tariff concessions. The application must meet core criteria, notably that no substitutable goods are produced in Australia in the ordinary course of business at the time of application. If these criteria are met, the CEO is required to make a TCO, which declares the goods to which a specified item of Schedule 4 to the Customs Tariff Act 1995 applies. For instance, Instrument TCO No. 0510889, made on 28 October 2005, lowered the duty on certain Recirculators and Heat Exchangers from 5% to 0%. This TCO came into effect on 16 August 2005, the date the application was lodged, and does not affect any rights or impose liabilities for actions prior to its registration. Importers of these goods may apply for a refund of duties paid since the effective date of the TCO. The Act's provisions extend to the Commonwealth jurisdiction, and any exclusions or exemptions are outlined in the Act itself. Subordinate instruments may further define or restrict the application of the Act's provisions.
Key Provisions
The Customs Act 1901 provides a framework for Tariff Concession Orders (TCOs) under Part XVA, with section 269F allowing individuals or entities to apply for such concessions. The CEO must determine whether an application meets the core criteria set out in section 269C, which requires that on the application date, no substitutable goods were produced in Australia in the ordinary course of business. The definitions of "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively. If the CEO is satisfied that these criteria are met, they must make a written order, as stipulated in section 269P(3), declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies.
The obligations imposed by the Act on parties applying for a TCO include ensuring that the application is not in respect of goods specified in section 269SJ, which are ineligible for concessions. Furthermore, the CEO has an obligation to publish a notice in the Gazette under subsection 269K(1) as soon as practicable after accepting a TCO application as valid. This notice must invite any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO. In the case of TCO No. 0510889, no submissions were received in response to this invitation.
In terms of consequences for non-compliance or breaches of the Act, specific penalties or civil/criminal consequences are not detailed within the text. However, it is clear that the rights of importers will be beneficially affected, and under paragraph 126(1)(r) of the Regulations, importers of such goods can apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. Importantly, the TCO does not impose any liabilities on any person for actions taken before the date of registration, thus protecting the rights of all parties involved except the Commonwealth.