EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0708871
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 Limited applied for a TCO in respect of certain tactile pressure indicating sensor film on 12 June 2007.
Instrument
TCO No 0708871 was made on 24 August 2007. It declares that those certain tactile pressure indicating sensor film 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 free.
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. 0708871 is taken to have come into force on 12 June 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 Customs Act 1901, enacted by the Australian Parliament, provides the framework for administering customs duties and includes provisions for Tariff Concession Orders (TCOs) to encourage the production of certain goods within Australia by offering duty concessions on imported substitutes. The Act was introduced to address the gap in ensuring that Australian industries can compete effectively with imported goods by providing tariff relief. This instrument, Tariff Concession Instrument No. 0708871, made on 24 August 2007, grants a tariff concession for certain tactile pressure indicating sensor films, reducing the duty from 5% to free, thereby aligning with the policy objective of fostering domestic production where no substitutable goods are produced in Australia. The instrument was made by the Chief Executive Officer of Customs following an application by Bluescope Steel Limited, and no objections were received during the consultation period.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to individuals and entities seeking to import goods into Australia, with a particular focus on those applying for a TCO to benefit from lower customs duty rates on specified goods. The TCO mechanism is designed to reduce the duty burden on certain goods, provided they meet the criteria outlined in the Act, such as the absence of substitutable goods produced in Australia. The geographic reach of the Act is national, with its application extending across all jurisdictions within Australia. However, certain goods are excluded from TCO eligibility, as specified in section 269SJ of the Act. The Act also allows for the possibility of subordinate instruments to further define or modify its application. The Tariff Concession Instrument No. 0708871, for example, illustrates how the Act can be applied in practice, providing tariff concessions for specific goods such as tactile pressure indicating sensor film.
Key Provisions
The main provisions of Tariff Concession Instrument No. 0708871, as outlined in the Customs Act 1901, concern the granting of tariff concessions for certain goods. Specifically, Section 269F of the Act allows for an application to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of goods (s. 269F). If the application is deemed valid and does not pertain to goods that cannot be subject to a TCO under Section 269SJ, the CEO must determine whether it meets the core criteria set forth in Section 269C. This involves assessing whether there were no substitutable goods produced in Australia in the ordinary course of business on the day the application was lodged, as defined in Sections 269D and 269E (s. 269C). If the core criteria are met, the CEO must issue a written TCO, as stipulated in Subsection 269P(3).
The obligations imposed by the Act on the parties involved are primarily centred on the application process and the evaluation of the criteria for issuing a TCO. The CEO must accept and evaluate the application to determine if it meets the core criteria, including verifying that no substitutable goods were produced in Australia on the application date. The CEO is also required to publish a notice in the Gazette inviting any interested parties to submit objections to the TCO if they believe it should not be made, as outlined in Subsection 269K(1). Additionally, the TCO must be issued if the application meets the criteria, ensuring that no substitutable goods were produced in Australia on the application date.
In terms of penalties and consequences, the Customs Act 1901 does not specify explicit criminal or civil penalties for breaches related to TCO applications or the issuance of TCOs. However, non-compliance with the conditions set forth in the TCO could potentially lead to administrative actions, such as the revocation of tariff concessions or other corrective measures taken by the CEO of Customs. Importers who fail to comply with the terms of the TCO may also face penalties under the Customs Act and related regulations, which could include fines or other financial liabilities. It is important to note that while the Act does not specify maximum penalties, the overall regulatory framework provides for enforcement actions to ensure compliance.