EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0602457
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 horizontal parallel shaft reducers on 17 January 2006.
Instrument
TCO No 0602457 was made on 18 April 2006. It declares that those certain horizontal parallel shaft reducers 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. 0602457 is taken to have come into force on 17 January 2006.
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. 0602457 was enacted in 2006 under the Customs Act 1901, with the aim of addressing the need for tariff concessions for specific goods that are not produced in Australia, thereby facilitating their importation at a reduced duty rate. The Customs Act 1901 establishes a framework for the Chief Executive Officer of Customs to consider and grant Tariff Concession Orders (TCOs) for goods that meet certain criteria, particularly where no substitutable goods are produced domestically. The policy objective of this instrument is to ensure that such goods can be imported more affordably, potentially stimulating trade and economic activity. The instrument was enacted by the Australian government, reflecting a legislative intent to streamline customs processes and support economic efficiency by reducing the cost burden on importers of certain goods.
Scope and Application
The Customs Act 1901, specifically through Part XVA, establishes a framework whereby the Chief Executive Officer of Customs (CEO) can grant Tariff Concession Orders (TCO) that reduce the customs duty rate for certain goods. This legislation applies to entities or individuals who wish to import specific goods that are not currently produced in Australia, thereby ensuring they do not face a higher rate of duty. The application process requires the CEO to determine whether the goods are substitutable, meaning if they are produced domestically, and if they meet the core criteria as outlined in section 269C of the Act. The geographic scope of this legislation is national, as it applies across Australia under the Commonwealth's customs regulations. Notably, the Act excludes certain goods from being subject to a TCO as specified in section 269SJ. The instrument TCO No. 0602457 was issued in response to an application by Bluescope Steel Ltd for a concession on horizontal parallel shaft reducers, and it came into effect on 17 January 2006. The application of the TCO is further regulated by the Customs Tariff Act 1995, which determines the specific duty rates.
Key Provisions
The key provisions of the Tariff Concession Instrument No. 0602457 under the Customs Act 1901 (section 269P(3)) involve the declaration of certain horizontal parallel shaft reducers as goods subject to a Tariff Concession Order (TCO). This instrument, made on 18 April 2006, reduces the duty rate for these specific goods from 10% to 0%. The decision to issue this TCO was based on the Chief Executive Officer of Customs (CEO) being satisfied that no substitutable goods were produced in Australia at the time the application was made. The TCO was issued under section 269C, which requires that the application meets the core criteria that no substitutable goods were produced in Australia on the day the application was lodged.
The Act imposes specific obligations on both the applicant and the CEO. For the applicant, the requirement is to submit a valid application to the CEO under section 269F, ensuring that the goods specified do not fall under the category of goods that cannot be subject to a TCO as outlined in section 269SJ. For the CEO, the obligation is to assess the application against the core criteria and, if satisfied, to make a written order declaring the goods subject to the TCO. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made, as required by section 269K(1).
In terms of consequences for non-compliance or breaches of the Act, the document does not specify any offences, penalties, or civil or criminal consequences for breach. However, the Act generally provides for a range of penalties for breaches of customs laws, which may include fines and imprisonment. The maximum penalties would be determined by the specific nature of the breach and the provisions of the Customs Act 1901. The TCO itself does not impose any liabilities on any person and does not affect the rights of a person, except to beneficially affect the rights of importers who can apply for a refund of duty on goods imported since the TCO came into force under paragraph 126(1)(r) of the Regulations.