EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701473
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 dust discharger assemblies on 24 January 2007.
Instrument
TCO No 0701473 was made on 13 July 2007. It declares that those certain dust discharger assemblies 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. 0701473 is taken to have come into force on 24 January 2007.
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. 0701473 was enacted in 2007 under the Customs Act 1901 to address the issue of tariff concessions for specific goods not produced domestically. This instrument was created to provide relief to importers of certain dust discharger assemblies by reducing their customs duty from the general rate of 5% to 0%, as no substitutable goods were being produced in Australia at the time of the application. The instrument was introduced by the Chief Executive Officer of Customs (CEO) following an application by Bluescope Steel Ltd on 24 January 2007. The CEO's decision was based on the core criteria outlined in section 269C of the Act, which mandates that a Tariff Concession Order (TCO) can be issued if no substitutable goods are produced in Australia. The policy objective of this legislation is to facilitate the importation of goods that are not locally produced, thereby benefiting importers who can apply for duty refunds on goods imported since the effective date of the TCO.
Scope and Application
The Customs Act 1901, through Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs), which allow for reduced rates of customs duty on specified goods. These orders are made by the Chief Executive Officer of Customs (CEO) following an application by a person, provided the goods do not fall under the prohibited category outlined in section 269SJ. For a TCO to be granted, the application must meet core criteria, specifically that no substitutable goods are produced in Australia in the ordinary course of business on the date the application was lodged, as defined by sections 269C, 269D and 269E of the Act. Upon satisfying these criteria, the CEO is mandated to issue a TCO, which applies a prescribed lower rate of duty from the date of application lodging. This scheme facilitates tariff relief for specific goods, thereby influencing import costs and trade practices.
Geographically, the Act applies to the Commonwealth of Australia, affecting entities and individuals involved in the import of the specified goods subject to a TCO. The application process and the resultant tariff concession are subject to national oversight by the CEO, ensuring uniform implementation across jurisdictions. Importantly, the TCO does not retroactively affect any rights or liabilities of persons other than the Commonwealth, thus protecting established trade practices and obligations prior to the concession's effective date. The Act's reach is further extended through subordinate instruments, which can detail specific procedural and compliance requirements for the application and administration of TCOs.
Key Provisions
The Customs Act 1901 (the Act) under Part XVA, particularly section 269F, allows for the application of Tariff Concession Orders (TCO) for specific goods by the Chief Executive Officer of Customs (the CEO). If an applicant submits an application under section 269F, the CEO is required to assess whether it meets the core criteria as outlined in sections 269C, 269D, 269E, and 269P(3) of the Act. These sections specify that a TCO application is valid if no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged.
Once the CEO determines that an application meets the core criteria, they must issue a written order (a TCO) under section 269P(3) of the Act, effectively reducing the customs duty on the specified goods. For example, in TCO No. 0701473, certain dust discharger assemblies that previously carried a 5% duty rate were granted a 0% duty rate because no substitutable goods were being produced in Australia. This order came into force on the date of the application, 24 January 2007, as stipulated in section 269S(1) of the Act.
The CEO is obligated to publish a notice in the Gazette under subsection 269K(1) of the Act, inviting any interested parties to submit objections to the TCO. However, in this case, no submissions were received. This process ensures transparency and provides an opportunity for stakeholders to voice their concerns. Importers of the specified goods can also benefit from this order by applying for a refund of the duty paid on imports since the TCO came into force, as outlined in paragraph 126(1)(r) of the Regulations.
Failure to comply with the provisions of the Act and the TCO may lead to various consequences. Section 271 of the Act provides for civil and criminal penalties for breaches, which can include fines and imprisonment. The specific penalties depend on the nature and severity of the breach, but they serve as a deterrent to non-compliance with the customs regulations and the terms of the TCO.