EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0801272
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 air compressor gear wheel set on 23 January 2008.
Instrument
TCO No 0801272 was made on 4 April 2008. It declares that those certain air compressor gear wheel sets 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. 0801272 is taken to have come into force on 23 January 2008.
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 to manage the administration of customs and excise duties in Australia. The Act provides for the making of Tariff Concession Orders (TCOs) under Part XVA, which can lower the rate of customs duty on certain imported goods. The Tariff Concession Instrument No. 0801272, made under this Act, was introduced to address the specific case of Bluescope Steel Ltd, which applied for a TCO for certain air compressor gear wheel sets. The Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, meeting the core criteria for a TCO. Consequently, the instrument declares that the specified goods are subject to a zero rate of duty, down from the general rate of 5%. The instrument was made on 4 April 2008 and is taken to have come into force on the date of the application, 23 January 2008. This concession does not disadvantage any persons with rights as of the registration date nor impose liabilities on anyone for actions taken prior to the registration.
Scope and Application
The Tariff Concession Instrument No. 0801272, made under the Customs Act 1901, applies to any entity seeking to import specific air compressor gear wheel sets by reducing the customs duty on these goods from a general rate of 5% to free. This act is pertinent to the importer, the Chief Executive Officer of Customs who must approve the concession, and any entity that may have an interest in the tariff adjustment. The geographic reach of the legislation is national, as it pertains to importation activities across Australia. The legislation does not apply to goods specified in section 269SJ of the Customs Act 1901, which excludes certain goods from tariff concession orders. The application of the act can be extended or restricted through subordinate instruments, although no such instruments are noted in the explanatory statement. The act’s implementation is designed to ensure that no person other than the Commonwealth is disadvantaged or subjected to new liabilities due to the tariff concession, while potentially benefiting importers by allowing them to apply for a refund of duty on goods imported since the TCO came into effect on 23 January 2008.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0801272 (Section 269F, 269C, 269P) establish the procedure for making Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of specific goods. If the CEO is satisfied that the application does not pertain to goods specified in section 269SJ, which are ineligible for a TCO, the CEO must then determine whether the application meets the core criteria outlined in section 269C. This section requires that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business.
The obligations imposed by the Act on the parties involved are primarily on the CEO of Customs. Upon receiving an application for a TCO, the CEO must first verify that it does not involve goods that are ineligible under section 269SJ. If the application is valid, the CEO must then ensure that it meets the core criteria specified in section 269C. This entails confirming that no substitutable goods were produced in Australia at the time the application was made. Should these conditions be satisfied, the CEO is obligated to make a written order declaring that the goods in question are subject to a specified rate of duty as outlined in Schedule 4 of the Customs Tariff Act 1995.
The Act also specifies the consequences for non-compliance with its provisions. While the explanatory statement does not explicitly outline criminal or civil penalties, it does mention the potential for administrative and financial repercussions for businesses that fail to comply with the conditions of a TCO. For example, failure to correctly apply for or adhere to the terms of a TCO could result in the imposition of duties on the goods, potentially leading to financial penalties or other administrative actions. However, the exact penalties are not detailed in the explanatory statement itself and would likely be found within the broader legislative framework of the Customs Act 1901.