EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0829304
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 Limited applied for a TCO in respect of certain valves steam parts on 03 September 2008.
Instrument
TCO No 0829304 was made on 28 November 2008. It declares that those certain valves steam parts 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. 0829304 is taken to have come into force on 03 September 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 provide for the administration of customs and excise duties, and to facilitate international trade by regulating the import and export of goods. Specifically, Part XVA of the Act introduces a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This scheme was introduced to address the need for flexibility in customs duty rates to support economic development and competitiveness by allowing for tariff concessions in certain circumstances. The Tariff Concession Instrument No. 0829304 was made under this Act to provide tariff concessions for specific goods, in this case certain valves steam parts, thereby reducing the duty from 5% to free, subject to the conditions outlined in the legislation. The objective of the policy, as stated, is to ensure that tariff concessions are granted only when no substitutable goods are produced in Australia, thereby supporting Australian production and innovation where feasible.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines the mechanism by which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. These orders, which lower the rate of customs duty on certain goods, apply to individuals or entities that lodge an application under section 269F of the Act. The application process is subject to certain criteria, including the absence of substitutable goods being produced in Australia, as defined by section 269C. This Act applies to goods that are not specified in section 269SJ, which excludes particular goods from being subject to a TCO. The geographic reach of this legislation is national, as it pertains to the customs duties governed by the Commonwealth of Australia. There are no exclusions or exemptions stated within the text, although the application process involves scrutiny to ensure the goods meet the specified criteria. The TCO does not affect the rights of any person other than the Commonwealth in a detrimental way and does not impose liabilities on anyone other than the Commonwealth. Subordinate instruments may further extend or restrict the application of this Act.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 0829304, pertain to the granting of tariff concessions on certain goods under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). If the application meets the core criteria outlined in section 269C, the CEO must make a written TCO order as per section 269P(3). This instrument (TCO No. 0829304) declares that the valves steam parts specified in the application are subject to a concession, with the duty rate set at free, down from the general rate of 5% (section 269P(3)).
The Customs Act 1901 imposes specific obligations on both the applicant and the CEO. For the applicant, the obligation is to submit an application under section 269F, ensuring it is not for goods specified in section 269SJ. The CEO, upon receiving a valid application, must determine if it meets the core criteria and, if so, make a TCO (section 269C). Additionally, the CEO is required to publish a notice in the Gazette under subsection 269K(1), inviting submissions from any person who believes the TCO should not be made. The CEO must consider any submissions received before making the final decision.
The legislation includes specific consequences for breaches or non-compliance with the terms of the TCO. While the explanatory statement does not explicitly outline penalties for breach, it is understood that any failure to comply with the conditions set forth in the TCO could result in the nullification of the concession. In such cases, the goods may revert to the general rate of duty, and any duties already remitted may need to be repaid. However, the precise civil or criminal penalties are not detailed in the explanatory statement, and it would be prudent to consult the primary legislation or relevant legal counsel for comprehensive information on potential penalties.
Furthermore, the instrument ensures that the rights of individuals are protected. The commencement of the TCO does not disadvantage any person, except the Commonwealth, in respect of anything done or omitted before the registration date. Importers of the affected goods will benefit from this arrangement, as they can apply for a refund of duty on goods imported since the TCO's effective date (paragraph 126(1)(r) of the Regulations). Importantly, the TCO does not impose any new liabilities on any person.
In summary, the Tariff Concession Instrument No. 0829304 under the Customs Act 1901 provides a clear framework for the application, assessment, and implementation of tariff concessions on specified goods, with a focus on ensuring fairness and protecting the rights of all parties involved.