EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0720950
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 flare ignitors on 07 December 2007.
Instrument
TCO No 0720950 was made on 29 February 2008. It declares that those certain flare ignitors 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. 0720950 is taken to have come into force on 07 December 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, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). This Act was introduced to address the need for a streamlined process to grant tariff concessions on certain goods, ensuring that Australian businesses are not unfairly burdened by customs duties. The Explanatory Statement for Tariff Concession Instrument No. 0720950, made under the Customs Act 1901, clarifies the procedure for the CEO to assess and grant a TCO, focusing on the core criteria that must be met. Specifically, this instrument was created in response to an application by Bluescope Steel Ltd for certain flare ignitors, which were granted a tariff concession as no substitutable goods were produced in Australia. The instrument aims to facilitate the reduction of customs duties on specified goods, thereby benefiting importers without imposing additional liabilities or disadvantaging any party.
Scope and Application
The Customs Act 1901, specifically Part XVA, governs the process by which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (CEO). The Act applies to any person or entity that wishes to apply for a TCO in respect of goods, provided these goods are not specified in section 269SJ, which outlines those goods that cannot be subject to a TCO. The legislation extends its application across Australia, as it is a Commonwealth Act. The core criteria for a TCO application to be considered include the absence of substitutable goods produced in Australia on the day the application was lodged, as defined under sections 269C, 269D, and 269E of the Act. If these criteria are met, the CEO must issue a written TCO order, specifying the applicable rate of duty, which can include a rate of duty as low as free. The rights of importers will be positively affected by such orders, as they can apply for a refund of duty on goods imported since the TCO came into force, as per paragraph 126(1)(r) of the Regulations. Importantly, the Act ensures that the rights of non-Commonwealth persons are not adversely affected by the TCO, and it does not impose any liabilities on any person. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, although in the case of TCO No. 0720950, no submissions were received. The TCO is deemed to have come into force on the day the application was lodged, as per subsection 269S(1) of the Act.
Key Provisions
The Customs Act 1901, under Part XVA, provides the framework for Tariff Concession Orders (TCO) which can be applied for by individuals or companies to the Chief Executive Officer of Customs (CEO). Section 269F of the Act allows an application for a TCO in respect of certain goods, provided they do not fall under the restricted categories specified in section 269SJ. The core criteria for a TCO, as outlined in section 269C, require that on the day the application is lodged, no substitutable goods are produced in Australia in the ordinary course of business. Definitions for terms such as "goods produced in Australia" and "ordinary course of business" are provided in sections 269D and 269E, respectively, while "substitutable goods" is defined in section 269B.
Entities such as Bluescope Steel Ltd must adhere to the stipulations of the Act when applying for a TCO. They must ensure that their application meets the core criteria, and if the CEO is satisfied, a TCO will be issued as per section 269P(3). The CEO must also publish a notice in the Gazette inviting submissions from any interested parties, as required by subsection 269K(1). In the case of TCO No. 0720950, which was issued for certain flare ignitors, no submissions were received, and the TCO came into effect on the day the application was lodged, as per subsection 269S(1).
The obligations imposed by the Customs Act 1901 on entities applying for a TCO include ensuring that the application is valid and that the goods do not fall under the restricted categories. They must also provide all necessary information to the CEO to demonstrate that the core criteria are met. Importers, in particular, have the obligation to apply for a refund of duty on goods imported since the TCO came into force under paragraph 126(1)(r) of the Regulations.
Failure to comply with the provisions of the Customs Act 1901 and the associated Regulations could result in penalties. While specific offences and penalties are not detailed in the explanatory statement, breaches of customs regulations generally could lead to both civil and criminal consequences. Civil penalties might include fines, while criminal penalties could involve imprisonment, depending on the severity and intent of the breach. The maximum penalties would be determined by the specific provisions of the Act and Regulations applicable to the breach.