EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0824056
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 transformer 120 kv on 31 July 2008.
Instrument
TCO No 0824056 was made on 17 October 2008. It declares that those certain transformer 120 kv 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. 0824056 is taken to have come into force on 31 July 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. 0824056 was enacted under the Customs Act 1901 to provide tariff concessions for specific goods. The Act, established by the Australian Parliament, provides a framework through which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs), which lower the customs duty on certain goods. This legislation addresses the gap in the duty-free importation of goods where no substitutable Australian-made goods exist. The policy objective is to support the importation of goods that are not domestically produced, thereby promoting competition and potentially lowering costs for businesses and consumers. In this instance, Instrument TCO No. 0824056, made on 17 October 2008, applied to certain 120 kV transformers, reducing their duty rate from 5% to free, effective from the date of the application on 31 July 2008. This measure was implemented after Bluescope Steel Ltd successfully applied for the concession, and no objections were raised during the consultation period.
Scope and Application
The Customs Act 1901, specifically through Part XVA, governs the scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. These orders apply to goods specified in the application and provide a lower rate of customs duty for those goods. The Act applies to any person who can apply to the CEO for a TCO in respect of goods, provided the goods are not specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. The application must meet core criteria, including that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. The geographic reach of this legislation is national, as it applies across Australia under the Commonwealth's authority. The TCO does not affect any existing rights or impose liabilities on any person other than the Commonwealth. The rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the effective date of the TCO. This legislation is further extended and clarified through subordinate instruments, which detail specific processes and criteria for the application and approval of TCOs.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 0824056, revolve around the facilitation of Tariff Concession Orders (TCOs) under the Customs Act 1901 (sections 269C, 269F, 269K, 269P, and 269S). Section 269F allows an individual or entity to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning specific goods. If the CEO is satisfied that the application does not involve goods excluded by section 269SJ, they must determine if the application meets the core criteria outlined in section 269C. If satisfied, the CEO issues a written order (section 269P(3)) that declares the goods subject to the TCO, thereby applying a prescribed tariff item from Schedule 4 of the Customs Tariff Act 1995.
The obligations and requirements imposed by this Act include the process of applying for a TCO, the CEO's assessment of the application against the core criteria, and the potential for public consultation. Specifically, section 269K mandates that the CEO publish a notice in the Gazette inviting submissions from any interested parties who might oppose the TCO. In the case of TCO No. 0824056, no such submissions were received, indicating that the process was transparent and uncontested. Additionally, section 269S stipulates that a TCO comes into force on the day the application is lodged, thereby retroactively applying tariff concessions from that date.
Offences and penalties for breaches of the Customs Act 1901 are not explicitly detailed in the provided text but generally include criminal and civil penalties for non-compliance with customs regulations. Given the nature of tariff concessions, breaches could potentially involve fraudulent applications or misrepresentations, which may attract penalties under the broader customs framework. Although specific penalties are not detailed here, they could include fines or imprisonment for criminal offences, and financial penalties or legal action for civil breaches, as per the relevant sections of the Customs Act and associated regulations.
The tariff concessions provided by TCO No. 0824056 directly benefit importers of the specified goods by reducing the duty rate from 5% to free. The commencement of the TCO on 31 July 2008 ensures that importers can claim refunds for duties paid on goods imported since that date under paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not disadvantage any person or impose new liabilities on anyone, ensuring that its effects are strictly limited to the tariff concessions it grants. This careful structuring ensures that while the concessions provide economic benefits, they do not create unintended legal liabilities or disadvantages for any party.