EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0829954
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 fans parts on 08 September 2008.
Instrument
TCO No 0829954 was made on 28 November 2008. It declares that those certain fans 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. 0829954 is taken to have come into force on 08 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 Tariff Concession Instrument No. 0829954, enacted under the Customs Act 1901, addresses the problem of ensuring that specific goods eligible for tariff concessions are not being produced in Australia, thereby justifying the concession. This instrument was introduced to streamline the process of granting tariff concessions by the Chief Executive Officer of Customs. The Act was passed by the Australian Parliament to regulate the import and export of goods, including the application of customs duties and other charges. The policy objective, as stated in the Act, is to ensure that tariff concessions are granted fairly and in accordance with the criteria set out in the legislation, particularly when no substitutable goods are produced in Australia.
The instrument was enacted following an application by Bluescope Steel Limited for a tariff concession on certain fan parts, which was subsequently approved by the CEO of Customs. This approval was based on the absence of substitutable goods being produced in Australia at the time of the application. The tariff concession granted under this instrument significantly reduces the duty on these goods from 5% to free, effective from the date of the application, 08 September 2008. This measure aims to benefit importers by potentially allowing them to apply for a refund of duty on goods imported since the commencement date of the concession, without imposing any additional liabilities on any person.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This Act applies to entities or individuals seeking a reduction in customs duty on certain goods by applying for a TCO. The application process requires the applicant to meet core criteria, which include demonstrating that no substitutable goods are produced in Australia at the time of application. The TCOs are applicable nationally across Australia and are intended to benefit entities by reducing the rate of customs duty on specific goods, provided they meet the statutory criteria. Notably, the Act excludes certain goods from being subject to a TCO, as outlined in section 269SJ. The application of the Act is further defined through subordinate instruments such as regulations, which may provide additional detail or clarification on the application process and criteria. The Tariff Concession Instrument No. 0829954 exemplifies this process, where Bluescope Steel Limited successfully applied for a TCO on certain fan parts, resulting in a duty-free status for these goods.
Key Provisions
The Tariff Concession Instrument No. 0829954, made under the Customs Act 1901 (sections 269F, 269C, and 269P), establishes a tariff concession order (TCO) for certain fans parts. The CEO of Customs must ensure that the goods in question are not specified in section 269SJ of the Act and satisfy the core criteria outlined in section 269C, which includes confirming that no substitutable goods were produced in Australia on the date of the application. This TCO declares that the specified fans parts are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, reducing the duty from the general rate of 5% to free.
The Act imposes several obligations on parties applying for a TCO. The applicant, in this case Bluescope Steel Limited, must submit a valid application to the CEO, ensuring it meets the core criteria. The CEO, upon receiving the application, must publish a notice in the Gazette inviting submissions from any interested parties. Once the CEO is satisfied that the application meets the criteria and no submissions have been received, the CEO must make a written TCO order. The TCO will be effective from the date the application was lodged, as per subsection 269S(1) of the Act.
Failure to comply with the requirements of the Customs Act 1901 may result in legal consequences. However, the explanatory statement does not detail specific offences or penalties related to breaches of the TCO or its provisions. Importers of the affected goods may, however, be able to apply for a refund of duty on goods imported since the TCO came into force under paragraph 126(1)(r) of the Regulations, thereby benefitting from the tariff concession without incurring additional liabilities.
In conclusion, the Tariff Concession Instrument No. 0829954 facilitates a tariff concession for certain fans parts by reducing the customs duty rate from 5% to free, effective from the date of application. The Act mandates the CEO to ensure the application meets the core criteria and publishes a notice in the Gazette. The TCO does not disadvantage any person or impose new liabilities, and importers may apply for duty refunds for goods imported since the TCO's effective date.