EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0712979
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 gas burner parts on 21 August 2007.
Instrument
TCO No 0712979 was made on 29 October 2007. It declares that those certain gas burner 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 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. 0712979 is taken to have come into force on 21 August 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. 0712979 was enacted in 2007 as an amendment to the Customs Act 1901. This legislation was introduced to provide relief on customs duty for certain imported goods, specifically addressing the problem of ensuring that Australian businesses do not face unfair competition from domestically produced goods when seeking tariff concessions for imported products. The instrument was made by the Chief Executive Officer of Customs in accordance with the powers granted under section 269F of the Customs Act 1901. The policy objective of this instrument is to facilitate the import of goods for which no suitable domestic alternatives are available, thereby supporting Australian industries by allowing them to access competitively priced imported materials or components.
The instrument allows for a zero percent customs duty rate on certain gas burner parts, which was previously set at 5 percent, following an application by Bluescope Steel Ltd. This change was implemented to alleviate potential competitive disadvantages faced by Australian manufacturers who could not produce these specific parts domestically. The instrument's commencement date aligns with the date the application was lodged, ensuring that the tariff concession is effective retroactively from the application date, thereby protecting the rights of importers and providing them with the opportunity to claim refunds for duties paid on imports before the concession was enacted.
Scope and Application
The Tariff Concession Instrument No. 0712979 under the Customs Act 1901 applies to entities seeking tariff concessions on certain goods imported into Australia, specifically targeting those who apply for such concessions through the Chief Executive Officer of Customs. This instrument is designed to benefit businesses by reducing customs duty rates on specified goods, provided no substitutable goods are produced in Australia in the ordinary course of business. The application of this Instrument is not limited to a particular industry but is available to any entity that meets the criteria under the Act. The instrument has a national jurisdictional reach as it is a Commonwealth instrument, applicable across Australia. The exclusions under this Act are limited to goods specified in section 269SJ of the Customs Act 1901, which cannot be subject to a Tariff Concession Order. Additionally, the application of this Instrument can be extended or restricted through subordinate instruments, ensuring flexibility in its application based on changing economic conditions or policy objectives.
Key Provisions
The main operative sections of this legislation revolve around Tariff Concession Orders (TCOs) under Part XVA of the Customs Act 1901. Section 269F allows individuals to apply for a TCO with respect to specific goods, provided these goods are not listed in section 269SJ, which specifies goods ineligible for TCOs. Section 269C states that an application meets the core criteria if, at the time of application, no substitutable goods were produced in Australia in the ordinary course of business. "Substitutable goods" are defined under section 269D as goods produced in Australia that serve the same purpose or design as the goods in question. If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they must issue a written TCO, as stipulated in section 269P(3).
The obligations imposed by this legislation primarily fall on the CEO of Customs. Once a TCO application is accepted as valid, the CEO must publish a notice in the Gazette inviting any person who believes the TCO should not be made to submit a response, as per section 269K(1). This process ensures transparency and allows for any objections to be heard. If no submissions are received, the CEO must proceed with the TCO. The CEO is also responsible for ensuring that the TCO does not adversely affect the rights of any person, as outlined in subsection 269S(1).
Breaching the provisions of this Act can result in civil or criminal consequences. Although specific offences and penalties are not detailed in this explanatory statement, general breaches of customs regulations can lead to substantial penalties. For instance, knowingly making a false statement or representation in an application for a TCO could result in fines and, in severe cases, imprisonment. The maximum penalties for such breaches are not explicitly stated in this document but are outlined in other sections of the Customs Act 1901 and related regulations. Non-compliance with the conditions set by a TCO, such as importing goods that do not qualify for the concession, could also lead to financial penalties or legal action.