EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0709147
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 cooling tower fan parts on 15 June 2007.
Instrument
TCO No 0709147 was made on 24 August 2007. It declares that those certain cooling tower fan parts 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. 0709147 is taken to have come into force on 15 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 was enacted by the Parliament of Australia to regulate the import and export of goods into and out of the country. It provides the legal framework for the administration of customs duties and other import charges, as well as facilitating the free flow of goods by reducing unnecessary barriers. The Act was introduced to address the need for a comprehensive and streamlined system for managing customs duties and related activities. Tariff Concession Instrument No. 0709147, made under the Customs Act 1901, aims to provide tariff concessions for specific goods by reducing or eliminating customs duties. The instrument was introduced to support industry by lowering the cost of imported goods, thereby enhancing competitiveness and economic efficiency. The Chief Executive Officer of Customs is responsible for making such tariff concession orders, following an application and a determination that the goods meet the specified criteria.
Scope and Application
The Tariff Concession Instrument No. 0709147 under the Customs Act 1901 applies to goods that are the subject of a Tariff Concession Order (TCO) issued by the Chief Executive Officer of Customs (CEO). Specifically, the Instrument applies to certain cooling tower fan parts for which Bluescope Steel Limited applied for the concession on 15 June 2007. The TCO mechanism is designed to provide relief from customs duties for goods that are not substitutable by goods produced in Australia, thereby incentivising imports of such goods. The geographic reach of the Act is national, applying across Australia, and the concession extends to any person importing the specified goods after the date the application was lodged. Any person can apply for a TCO, provided the goods do not fall under the restricted categories outlined in section 269SJ of the Act. The TCO becomes effective on the date of the application, in this case, 15 June 2007, and does not impose any liabilities on persons other than the Commonwealth nor affect any pre-existing rights.
Key Provisions
The Customs Act 1901 (the Act) facilitates the reduction or elimination of customs duty on specific goods through the creation of Tariff Concession Orders (TCOs). Section 269F allows any person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. For a TCO application to be considered, it must not pertain to goods listed in section 269SJ, which are ineligible for such concessions. The core criteria for a TCO, as outlined in section 269C, requires that on the day the application is lodged, no substitutable goods are produced in Australia in the ordinary course of business. The definitions of key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269P respectively.
The CEO is obligated to decide whether a TCO application meets the core criteria and, if satisfied, must make a written order (TCO) declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. This order will then apply a lower rate of customs duty or make the goods duty-free. Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons the TCO should not be made. In the case of TCO No. 0709147, Bluescope Steel Limited applied for a TCO for certain cooling tower fan parts, which was granted on 24 August 2007. The TCO came into force on 15 June 2007, the day the application was lodged, as stipulated in subsection 269S(1).
In terms of consequences for breach, the Act does not explicitly outline specific offences, penalties, or civil/criminal consequences for failing to comply with the provisions related to TCOs. However, any failure to adhere to the terms and conditions of a TCO may result in the re-imposition of duties or other penalties as prescribed under the Customs Act 1901 and associated regulations. Importers are encouraged to ensure compliance with the terms of the TCO to avoid any potential liabilities or disadvantages that may arise from non-compliance.