EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516647
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 Shock Absorbers and/or Resistance Dampers on 25 November 2005.
Instrument
TCO No 0516647 was made on 13 February 2006. It declares that those certain Shock Absorbers and/or Resistance Dampers 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. 0516647 is taken to have come into force on 25 November 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 Parliament of Australia, facilitates the granting of Tariff Concession Orders (TCOs) to provide relief from customs duties on specified goods, thus encouraging the import of goods that are not produced domestically. The Tariff Concession Instrument No. 0516647, issued on 13 February 2006, exemplifies this mechanism by reducing the duty on certain Shock Absorbers and/or Resistance Dampers from 5% to 0%. This order was made after the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, fulfilling the core criteria outlined in section 269C of the Act. The instrument was introduced to address the need for tariff concessions in cases where domestic production is absent, thereby promoting the importation of these goods and supporting related industries without imposing any liabilities on individuals or entities other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0516647 under the Customs Act 1901 applies to the specific case of certain Shock Absorbers and/or Resistance Dampers for which Bluescope Steel Ltd applied for a Tariff Concession Order (TCO) on 25 November 2005. The Act allows the Chief Executive Officer of Customs (CEO) to make a TCO that applies a lower rate of customs duty to goods if certain conditions are met, including that no substitutable goods are produced in Australia. In this instance, the CEO determined that the application met the core criteria and made a TCO on 13 February 2006, reducing the duty on the specified goods from 5% to 0%. The TCO applies nationally and is effective as of the date the application was lodged, which is 25 November 2005, without retroactively affecting the rights of any person other than the Commonwealth. The legislation ensures that importers can apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The primary sections of the Customs Act 1901 governing the scheme for Tariff Concession Orders (TCOs) are sections 269C, 269B, 269D, 269E, 269F, 269P, and 269S. Section 269F allows an application to be made to the Chief Executive Officer (CEO) of Customs for a TCO in respect of specific goods. If the application meets the core criteria, as outlined in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, the CEO must issue a written order declaring the goods subject to the TCO. The definition of key terms such as "goods produced in Australia", "ordinary course of business", and "substitutable goods" are provided in sections 269B, 269D, and 269E respectively.
The Act imposes several obligations on the parties involved. The CEO of Customs is required to decide whether an application for a TCO meets the core criteria. If satisfied, the CEO must issue a written TCO order. Additionally, the CEO must publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to lodge a submission. The CEO is also required to consider any submissions received in response to the notice. Importers have the right to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force.
The Act does not specify any direct offences, penalties, or civil/criminal consequences for breach related to the TCO scheme. However, the TCO does not affect the rights of a person other than the Commonwealth as at the date of registration, ensuring that it does not disadvantage any person or impose liabilities on a person in respect of anything done or omitted to be done before the date of registration. The rights of importers are beneficially affected, as they can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force.