EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0840067
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 drive shafts on 17 November 2008.
Instrument
TCO No 0840067 was made on 30 January 2009. It declares that those certain drive 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. 0840067 is taken to have come into force on 17 November 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 Australian Parliament, provides a framework for the administration of customs and excise in Australia. Specifically, Part XVA of the Act establishes a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). The instrument F2009L00539, also known as Tariff Concession Instrument No. 0840067, was introduced to address the specific issue of granting tariff concessions for certain goods that meet the core criteria, as outlined in the Act. This instrument was created in response to an application by Bluescope Steel Limited for a TCO concerning certain drive shafts, which were found to have no substitutable goods produced in Australia. The primary policy objective of this instrument is to provide tariff relief for goods that are not produced domestically, thereby facilitating their importation and potentially reducing costs for businesses and consumers.
Scope and Application
The Tariff Concession Instrument No. 0840067, made under the Customs Act 1901, applies specifically to the goods for which Bluescope Steel Limited applied for a Tariff Concession Order (TCO) concerning certain drive shafts. This legislation is designed to reduce or eliminate customs duty on specified goods if the Chief Executive Officer of Customs determines that no substitutable goods are produced in Australia in the ordinary course of business. The scope of the Act involves the review and approval process for TCO applications by the CEO, ensuring that the concession does not disadvantage Australian production. The Act applies to entities seeking tariff concessions and importers of the specified goods, with the aim of benefiting those who import the particular drive shafts by providing a zero-rate duty. The geographic and jurisdictional reach of this Act is national, as it pertains to the Commonwealth's customs regulations. There are no exclusions or exemptions specified in this particular TCO, and the Act’s application is not extended or restricted through subordinate instruments in this instance.
Key Provisions
The Customs Act 1901 establishes a framework under which the Chief Executive Officer of Customs (CEO) can issue Tariff Concession Orders (TCOs) to provide lower rates of customs duty on certain goods (sections 269F and 269P). Specifically, section 269C stipulates that a TCO application is eligible if, on the day it is lodged, no substitutable goods are produced in Australia in the ordinary course of business. This means that the goods in question must not have local alternatives that serve the same purpose or design use. To qualify, the CEO must also ensure that the goods do not fall under the restricted list outlined in section 269SJ. Once the CEO confirms that these core criteria are met, a TCO is issued, as detailed in section 269P(3), effectively granting a tariff concession to the specified goods.
Entities subject to this Act, including Bluescope Steel Limited, must ensure that their applications for TCOs comply with the legislative requirements. The CEO has a duty to publish a notice in the Gazette inviting any interested parties to submit objections if they believe a TCO should not be issued (subsection 269K(1)). In the case of TCO No. 0840067, no submissions were received, and the TCO was issued on 30 January 2009, effective from 17 November 2008. This means that any substitutable goods that could have been produced in Australia were not identified, and the application met all necessary criteria.
Under the Customs Act 1901, the CEO must ensure that a TCO does not disadvantage any person other than the Commonwealth or impose any liabilities on such individuals for actions taken before the TCO was issued (subsection 269S(1)). In this specific instance, the TCO benefits importers by potentially allowing them to apply for a refund of duty on goods imported since the TCO came into effect (paragraph 126(1)(r) of the Regulations). However, it is crucial that all parties comply with the terms of the TCO to avoid any potential legal ramifications.
Failure to comply with the provisions of the Customs Act 1901 regarding TCOs could result in various civil or criminal penalties. While the specific penalties are not outlined in the Explanatory Statement, breaches of the Act generally attract penalties under sections 278 to 280 of the Customs Act 1901, which can include substantial fines and, in some cases, imprisonment. The exact penalties depend on the nature and severity of the breach, but they are intended to ensure compliance with the legislative requirements governing TCOs.