EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510891
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 Guide Vane Bearings on 17 August 2005.
Instrument
TCO No 0510891 was made on 28 October 2005. It declares that those certain Guide Vane 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 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. 0510891 is taken to have come into force on 17 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, enacted by the Australian Parliament, provides for a scheme through which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs, facilitating the reduction of customs duties on certain goods. This scheme was introduced to address the need for tariff reductions on specific goods where no substitutable goods are produced in Australia. The Tariff Concession Instrument No. 0510891, issued under this Act, is an example of such a concession. In this case, Bluescope Steel applied for and was granted a TCO for certain Guide Vane Bearings, reducing the duty rate from 5% to 0%. The instrument was made effective from 17 August 2005, the date the application was lodged, and no submissions were received against the concession. The policy objective of this legislation is to support Australian importers by reducing the cost of specific goods through tariff concessions, provided no substitutable goods are produced domestically.
Scope and Application
The Customs Act 1901, through Part XVA, governs the process of applying for Tariff Concession Orders (TCOs) that allow for lower rates of customs duty on specified goods. This Act applies to any person or entity seeking a concession on customs duties for goods imported into Australia. The application process involves submitting an application to the Chief Executive Officer of Customs (CEO) who must then determine if the application meets the core criteria set out in the Act, specifically ensuring that no substitutable goods are produced in Australia. If the CEO is satisfied that the application meets these criteria, a TCO is issued, providing a concession on the duty rate for the specified goods. The geographic reach of this Act is national, as it applies to goods entering Australia. There are specific exclusions, such as goods listed in section 269SJ, which cannot be subject to a TCO. The application of the Act may be extended or restricted through subordinate instruments, which provide further details on the administration and enforcement of the TCOs. The Tariff Concession Instrument No. 0510891, for instance, was issued for certain Guide Vane Bearings, effectively reducing the duty rate from 5% to 0%.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0510891 are Sections 269C, 269B, and 269P(3) of the Customs Act 1901. Section 269C requires that a Tariff Concession Order (TCO) application meets core criteria, which includes the absence of substitutable goods produced in Australia. Section 269B defines key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods." Section 269P(3) mandates that if the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria, they must issue a written order (TCO) specifying that the goods in question are subject to a particular item of Schedule 4 to the Customs Tariff Act 1995. This TCO results in a concession on the duty rate for the specified goods.
The Act imposes several obligations on the parties involved. For example, under Section 269F, an applicant can apply to the CEO for a TCO in respect of goods, provided the goods are not specified in Section 269SJ, which lists those that cannot be subject to a TCO. The CEO must then evaluate whether the application meets the core criteria as defined by Sections 269C and 269B. If the criteria are met, the CEO is obligated to issue a TCO as per Section 269P(3). Additionally, under Section 269K(1), the CEO must publish a notice in the Gazette inviting any interested party to submit objections if they believe the TCO should not be made. The CEO must also consider these submissions before finalising the TCO.
Breach of the requirements or failure to comply with the provisions of the Act can result in various civil or criminal consequences. The specific offences, penalties, or consequences are not detailed in the explanatory statement; however, under the general principles of the Customs Act 1901, breaches may result in penalties such as fines or imprisonment. The exact penalties would depend on the nature and severity of the breach, and would be determined according to other relevant sections of the Customs Act or associated regulations.