EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0713175
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 carbon brushes ac motor on 17 August 2007.
Instrument
TCO No 0713175 was made on 19 October 2007. It declares that those certain carbon brushes ac motor 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. 0713175 is taken to have come into force on 17 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. 0713175, enacted under the Customs Act 1901, aims to address the issue of ensuring that tariff concessions are appropriately applied to goods that are not produced in Australia and for which no suitable substitute is manufactured domestically. This instrument was introduced to streamline the process for granting tariff concessions and to provide clarity and certainty for businesses that import specific goods. The instrument was enacted by the Chief Executive Officer of Customs, who has the authority to make Tariff Concession Orders (TCOs) under section 269F of the Customs Act 1901. The policy objective behind this legislation is to encourage the importation of goods by reducing the duty on those that cannot be substitutively produced in Australia, thereby promoting competition and providing economic benefits to importers.
The explanatory statement accompanying the instrument details the process undertaken by the CEO in accepting the application from Bluescope Steel Limited for a TCO concerning certain carbon brushes for AC motors, and confirms that the application met the core criteria as no substitutable goods were produced in Australia at the time of the application. The tariff rate for these goods was adjusted from 5% to free, effective from the date the application was lodged, 17 August 2007. The CEO published a notice in the Gazette inviting any interested parties to submit objections, but none were received, leading to the issuance of the TCO on 19 October 2007. This instrument ensures that the rights of importers are positively affected and that no new liabilities are imposed on any person as a result of its implementation.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which applies to goods that are subject to reduced rates of customs duty. Any person may apply to the CEO for a TCO in respect of goods, provided the goods are not those specified in section 269SJ of the Act as ineligible for tariff concessions. The CEO is required to assess whether the application meets the core criteria, which include the condition that no substitutable goods are produced in Australia at the time of the application. If the application satisfies these criteria, a TCO is issued, reducing the duty on the specified goods. This particular legislation applies to the goods specified in TCO No. 0713175, in this instance certain carbon brushes ac motor, and operates nationally within Australia. The Act ensures that the TCO does not adversely affect the rights of any person, other than the Commonwealth, as at the date of registration, nor impose liabilities on any person for actions taken prior to the TCO’s registration. The TCO also allows for the refund of duties on goods imported since the effective date of the concession.
Key Provisions
The Customs Act 1901, specifically under Part XVA, outlines a scheme where Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO) to provide lower rates of customs duty on certain goods. Section 269F allows for an application to be made to the CEO for a TCO, provided that the goods in question are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. The CEO's decision to grant a TCO hinges on whether the application meets the core criteria set out in section 269C, which requires that, on the day of application, no substitutable goods are being produced in Australia in the ordinary course of business.
The obligations imposed on the parties involved under this Act are primarily focused on the application process and the conditions that must be satisfied. The applicant, in this case Bluescope Steel Limited, must submit a valid application to the CEO. The CEO, in turn, has the obligation to assess the application against the core criteria and, if satisfied, to make a written order declaring the goods to which a prescribed tariff item applies. The CEO also has a duty to publish a notice in the Gazette inviting any person to submit reasons why the TCO should not be made. In this instance, the CEO published the notice but did not receive any submissions.
Failing to comply with the obligations or breaching the provisions of the Act can result in penalties and consequences. Although specific penalties are not detailed in the explanatory statement, it is implied that breaches of the Customs Act 1901, including failure to adhere to the TCO requirements, can lead to enforcement actions by the relevant authorities. The consequences for non-compliance could include the imposition of duties at the standard rate, financial penalties, and potential legal action. The Act does not impose any liabilities on persons other than the Commonwealth and protects the rights of persons as at the date of registration, ensuring that no one is disadvantaged by the TCO.