EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0719989
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 (AIS) Pty Ltd applied for a TCO in respect of certain thermoplastic hand welders on 23 November 2007.
Instrument
TCO No 0719989 was made on 01 February 2008. It declares that those certain thermoplastic hand welders 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. 0719989 is taken to have come into force on 23 November 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. 0719989, made under the Customs Act 1901, was enacted in 2008 to address the need for tariff concessions for specific goods, in this case, certain thermoplastic hand welders. This legislation was introduced to facilitate a reduction in customs duty rates for these goods, aligning with the broader policy objective of promoting competitive pricing and accessibility within the Australian market. The instrument was developed following an application by Bluescope Steel (AIS) Pty Ltd, and after the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, thus satisfying the core criteria set out in the Act. The instrument came into effect on the date the application was lodged, 23 November 2007, and it aims to benefit importers by providing a refund of duty on goods imported since that date without imposing any additional liabilities on other stakeholders.
Scope and Application
The Customs Act 1901, as amended, provides a framework for Tariff Concession Orders (TCOs) under Part XVA, which applies to goods for which an application is made by any person, not limited to specific industries or entities, provided the application meets certain core criteria. The application process requires the Chief Executive Officer of Customs (CEO) to determine if no substitutable goods are produced in Australia in the ordinary course of business. If satisfied, the CEO issues a TCO, thereby reducing the customs duty on specified goods, as exemplified by Tariff Concession Instrument No. 0719989 for certain thermoplastic hand welders, which now attract a free rate of duty instead of the general 5%. This Act applies across the Commonwealth of Australia and its subordinate instruments may further define or refine the application of TCOs. Importantly, the Act ensures that the rights of individuals and entities other than the Commonwealth are not adversely affected by the issuance of a TCO, and importers can seek refunds for duties paid prior to the TCO's effective date.
Key Provisions
The primary operative sections of this piece of legislation are sections 269F, 269C, 269B, 269E, and 269P of the Customs Act 1901, along with the specific Tariff Concession Order (TCO) No 0719989. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO for goods that are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. Section 269C outlines that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Section 269B defines "goods produced in Australia" and "ordinary course of business," and section 269E specifies the meaning of "substitutable goods." Finally, subsection 269P(3) mandates that if the CEO is satisfied that a TCO application meets the core criteria, they must issue a written order declaring that the goods in question are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995.
The Customs Act 1901 imposes specific obligations on parties applying for a TCO and on the CEO who reviews and issues these orders. Applicants must ensure their submissions are valid and not in respect of goods listed in section 269SJ. They must also substantiate that no substitutable goods were produced in Australia at the time of application. The CEO must review the application against the core criteria in section 269C and, if satisfied, make a written TCO. Furthermore, as per subsection 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not proceed. The CEO is also required to consider any such submissions before issuing the TCO.
Breach of the requirements or obligations stipulated in the Customs Act 1901 may lead to various consequences. While the explanatory statement does not detail specific offences or penalties, general provisions of the Customs Act 1901 apply. These could include administrative penalties for non-compliance, such as fines or imprisonment, depending on the nature and severity of the breach. The maximum penalties are not specified in this explanatory statement but would typically be determined by the relevant sections of the Act and associated regulations. Additionally, any person adversely affected by an incorrectly issued TCO might have recourse through legal challenges or appeals.