EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0833621
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 pinions and or pinion shafts on 01 October 2008.
Instrument
TCO No 0833621 was made on 19 December 2008. It declares that those certain gearbox pinions and or pinion shafts 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. 0833621 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, enacted by the Parliament of Australia, established a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO) to provide tariff concessions on specific goods. This mechanism was introduced to address the need for flexibility in customs duty rates to support industries, particularly in cases where no substitutable goods are produced in Australia. The objective is to promote economic efficiency and competitiveness by potentially lowering the duty rates on certain imported goods. Tariff Concession Instrument No. 0833621, made on 19 December 2008, exemplifies this process, where Bluescope Steel Limited successfully applied for a TCO on certain gearbox pinions and pinion shafts, resulting in a reduced duty rate from 5% to free, effective from 1 October 2008. This concession was granted after consultation and no objections were raised, ensuring that the policy objective of aiding the industry without disadvantaging other stakeholders was met.
Scope and Application
The Tariff Concession Instrument No. 0833621, made under Part XVA of the Customs Act 1901, applies to specific goods, namely certain gearbox pinions and or pinion shafts, for which Bluescope Steel Limited sought a tariff concession order (TCO) on 01 October 2008. This instrument is designed to provide relief from customs duty for these goods by the Chief Executive Officer of Customs (the CEO), contingent on the satisfaction of certain criteria stipulated in the Act. The application of this TCO is contingent upon the CEO being satisfied that no substitutable goods are produced in Australia in the ordinary course of business, which was the case for these particular goods. Once a TCO is made, it applies to the goods from the date the application was lodged, thereby granting a tariff concession from the general rate of 5% to a rate of duty that is free. The TCO is a Commonwealth instrument, extending its jurisdictional reach to any entity or person importing the specified goods into Australia, with the beneficial effect of potentially allowing importers to claim a refund of duty for goods imported since the effective date of the TCO.
Key Provisions
The Tariff Concession Instrument No. 0833621 under the Customs Act 1901 provides for a lower rate of customs duty on certain goods, specifically certain gearbox pinions and or pinion shafts, as stated in section 269C (1). Section 269F allows an application for such a concession to be made to the Chief Executive Officer of Customs (CEO), and if the application meets the core criteria, the CEO is required to make a written order, known as a Tariff Concession Order (TCO), as outlined in section 269P(3). The CEO must be satisfied that no substitutable goods were produced in Australia on the day the application was lodged, as per section 269C(1), which is further defined in sections 269B, 269D, and 269E of the Act.
Obligations under this legislation include the requirement for the CEO to consider any submissions received after publishing a notice in the Gazette, as stipulated in subsection 269K(1). In this case, no submissions were received, and the CEO proceeded to make the TCO. The TCO itself imposes obligations on the parties it governs, specifically that the concession applies to the named goods and that it comes into force on the day the application for the concession was lodged, as stated in subsection 269S(1). The TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration, ensuring no person is disadvantaged or imposed with liabilities for actions prior to the registration date, as per the explanatory statement.
For breaches of the obligations or requirements set out in the Customs Act 1901 or the Tariff Concession Instrument No. 0833621, the Act may provide for offences and penalties. However, the explanatory statement does not specify these penalties. Generally, under Australian law, breaches of customs regulations can lead to civil or criminal penalties, including fines and imprisonment, depending on the severity and intent of the breach. The specific penalties would be detailed in the primary legislation or associated regulations, which are not provided in the explanatory statement but can be sourced from the full text of the Customs Act 1901 and related instruments.