EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802001
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 bearing bushes on 04 February 2008.
Instrument
TCO No 0802001 was made on 11 April 2008. It declares that those certain bearing bushes 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. 0802001 is taken to have come into force on 04 February 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 Tariff Concession Instrument No. 0802001, enacted under the Customs Act 1901, addresses the need for tariff concessions to be granted to certain goods, facilitating trade by reducing or eliminating customs duty for specified items. This instrument was introduced to ensure that goods, which are not produced in Australia and have no substitutable domestic alternatives, receive appropriate tariff treatment to support industry and commerce. The instrument was made by the Chief Executive Officer of Customs, pursuant to section 269F of the Act, after Bluescope Steel Ltd applied for a tariff concession on certain bearing bushes, resulting in the elimination of the duty on these items. The instrument came into effect on the date the application was lodged, ensuring that any rights of importers are not adversely affected by the concession.
Scope and Application
The Customs Act 1901, specifically under Part XVA, authorises the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCO) to certain goods, thereby reducing or eliminating the customs duty applicable to those goods. This Act applies to any person or entity that imports goods eligible for a TCO, and it is concerned with the transactions involving such imports. The geographic reach of this Act is national, applying across Australia. The Act excludes certain goods specified in section 269SJ, which cannot be subject to a TCO. The scope of the Act can be extended or restricted through subordinate instruments, which can further detail the types of goods eligible for concessions or the criteria for TCO applications. The TCO No. 0802001, made on 11 April 2008, is an example of how this legislative framework is applied to specific goods, in this case, certain bearing bushes, by granting them a duty-free status as long as they meet the core criteria outlined in the Act.
Key Provisions
The Tariff Concession Instrument No. 0802001, under the Customs Act 1901, pertains to the application of tariff concessions to certain bearing bushes, specifically those applied for by Bluescope Steel Ltd. Section 269F of the Act allows for an application to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO), which can reduce the customs duty on goods not listed in section 269SJ. If the CEO determines that the application meets the core criteria, as outlined in section 269C, which requires that no substitutable goods are produced in Australia, a TCO is issued. This means the CEO must make a written order specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods. For the bearing bushes in question, this results in a duty-free status as per item 50 of Schedule 4, whereas the general duty rate is 5%.
The obligations imposed by the Act on parties, such as Bluescope Steel Ltd, include the necessity to apply for a TCO and provide sufficient evidence that no substitutable goods are produced in Australia. The CEO's obligations, as specified in section 269K, involve reviewing the application, deciding whether it meets the core criteria, and if satisfied, issuing the TCO. Additionally, the CEO must publish a notice in the Gazette, inviting any interested parties to submit objections to the TCO. In this case, no submissions were received, indicating no opposition to the issuance of TCO No. 0802001. The TCO's commencement date is the date the application was lodged, which is 04 February 2008, as per section 269S(1) of the Act. This date also determines the effective period of the TCO and its impact on rights and liabilities.
The Act and the resultant TCO do not adversely affect the rights of any person other than the Commonwealth as of the registration date. Importers, however, stand to benefit from this concession, as they can apply for a refund of duty on goods imported since the TCO's effective date, under paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any new liabilities on any person. The provisions are designed to ensure that the tariff concession does not unfairly disadvantage existing parties or impose retrospective liabilities.