EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0833618
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 gearbox and pinion assemblies on 01 October 2008.
Instrument
TCO No 0833618 was made on 19 December 2008. It declares that those certain gearbox and pinion assemblies 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. 0833618 is taken to have come into force on 01 October 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, as amended, provides the legislative framework for the imposition of customs duties on imported goods. In particular, Part XVA of the Act allows the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) that provide for a reduced rate of customs duty on specified goods. This mechanism was introduced to address the problem of ensuring that Australian industries have access to essential goods at a lower cost when no domestic alternatives exist. Enacted by the Australian Parliament, the policy objective behind this provision is to support industries by making certain goods more affordable, thereby encouraging competition and economic growth. In December 2008, Tariff Concession Order No. 0833618 was issued following an application by Bluescope Steel Limited for certain gearbox and pinion assemblies, which were determined not to have Australian substitutes. This order effectively reduced the duty on these assemblies from 5% to free, effective from the date of the application, 1 October 2008.
Scope and Application
The Tariff Concession Instrument No. 0833618 pertains to the Customs Act 1901 and applies to the process of granting Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation specifically concerns the application of a lower rate of customs duty to goods that are the subject of a TCO. Any person can apply for a TCO under section 269F of the Act, provided the goods do not fall under the list specified in section 269SJ, which outlines goods ineligible for a TCO. A TCO application is considered to meet the core criteria if, on the application date, no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269C, 269D, 269E and 269B of the Act. The CEO is mandated to issue a TCO if these conditions are satisfied, as stipulated in section 269P(3) of the Act. In this instance, the CEO granted a TCO to Bluescope Steel Limited for certain gearbox and pinion assemblies, applying a free rate of duty instead of the general rate of 5%. The TCO does not affect the rights of any person except the Commonwealth and does not impose liabilities on any person for actions taken before the TCO's effective date.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0833618, under the Customs Act 1901, focus on the establishment of Tariff Concession Orders (TCOs) and the process for their application and approval (ss 269C, 269F, 269K, 269P, 269S, 269SJ). The application process begins with a person applying to the Chief Executive Officer of Customs (CEO) for a TCO concerning certain goods, ensuring the goods are not specified in section 269SJ of the Act (s 269F). The CEO must then assess if the application meets the core criteria outlined in section 269C, specifically determining whether substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (s 269C, 269D, 269E). If the application meets these criteria, the CEO is required to issue a written order in the form of a TCO, which will apply a prescribed rate of duty from Schedule 4 of the Customs Tariff Act 1995 to the specified goods (s 269P(3)).
The obligations imposed by this legislation on the parties involved, particularly the CEO, include the timely assessment and approval of TCO applications, ensuring that they comply with the statutory criteria (s 269C). The CEO must also publish a notice in the Gazette inviting any interested parties to submit reasons why a TCO should not be granted, and consider any submissions received (s 269K). The obligations on applicants include providing detailed and accurate information about the goods in question, ensuring that they meet the criteria for a TCO, and responding to any inquiries or requests for additional information from the CEO (s 269F, 269K).
Any breaches of the provisions of this legislation could result in significant consequences for the parties involved. Although the explanatory statement does not detail specific offences or penalties, it is implicit that failure to comply with the requirements for TCO applications or the CEO’s decisions could lead to legal challenges or other administrative actions. The general principles of administrative law and the specific provisions of the Customs Act 1901 would apply to ensure that the process for granting TCOs is conducted lawfully and fairly. Any misuse of the TCO process could potentially lead to civil or criminal penalties under the broader framework of the Customs Act, depending on the nature and severity of the breach.