EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0840099
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 overhead travelling crane parts on 17 November 2008.
Instrument
TCO No 0840099 was made on 06 February 2009. It declares that those certain overhead travelling crane 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. 0840099 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 Tariff Concession Instrument No. 0840099, made under the Customs Act 1901, was enacted in 2009 to address the need for tariff concessions on certain imported goods. This legislation aims to provide relief from customs duties for specific goods that are not produced domestically, thereby encouraging trade and supporting economic activity. The instrument was introduced by the Chief Executive Officer of Customs following an application by Bluescope Steel Limited for tariff concessions on certain overhead travelling crane parts. The primary objective, as outlined in the explanatory statement, is to facilitate the importation of these goods by setting a zero rate of duty, which contrasts with the general rate of 5% applicable under the Customs Tariff Act 1995. This concession is contingent upon the CEO's determination that no substitutable goods are produced in Australia, thereby ensuring that the import of these specific items does not displace domestic production. The instrument came into effect on the date the application was lodged, 17 November 2008, and no submissions were received during the consultation period, indicating broad acceptance or lack of opposition to the tariff concession.
Scope and Application
The Customs Act 1901, specifically Part XVA, establishes a framework for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that lower the rate of customs duty on certain goods. This Act applies to any person or entity that wishes to import goods into Australia and may benefit from a reduced customs duty rate under a TCO. The application process involves submitting an application to the CEO, who must determine whether the goods in question meet the core criteria, such as the absence of substitutable goods produced in Australia. If the application is successful, a TCO is issued, granting tariff concessions on specific items as outlined in Schedule 4 of the Customs Tariff Act 1995. This legislative mechanism facilitates trade by reducing the financial burden on importers for certain goods. The TCOs have a jurisdictional reach across Australia and apply to all entities involved in the importation process, provided the goods meet the eligibility criteria. The Act does not specify exclusions or exemptions beyond those goods listed in section 269SJ, which are ineligible for tariff concessions. The scope of the Act is further defined by subordinate instruments which may detail additional conditions or criteria for tariff concessions.
Key Provisions
The main operative sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCOs) include sections 269C, 269B, 269D, 269E, 269F, 269P, and 269SJ. Section 269F allows an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO, while section 269C specifies the core criteria that an application must meet, namely that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269B clarifies the definitions of 'goods produced in Australia', 'ordinary course of business', and'substitutable goods', which are critical in determining if the core criteria are met. If the CEO is satisfied that the application meets these criteria, a written order is made under section 269P(3), declaring the goods subject to a lower rate of customs duty.
The Act imposes several obligations on the parties involved. The CEO must decide whether an application meets the core criteria, as outlined in section 269C, and if satisfied, issue a written TCO. Additionally, section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any interested parties who may oppose the TCO. For applicants, they must ensure their application is made in accordance with the criteria set out in section 269C and respond to any requirements or requests from the CEO. Importers who benefit from the TCO may be required to apply for a refund of duty on goods imported since the TCO came into effect, under paragraph 126(1)(r) of the Regulations.
Offences, penalties, or consequences for breaches of the Act are not explicitly detailed in the provided sections, but the Act's framework suggests civil or administrative consequences for non-compliance with the conditions set for TCOs. For instance, if an applicant provides false information in their TCO application, this could lead to the order being revoked or not issued, resulting in the applicant not receiving the intended tariff concession. Furthermore, if the CEO issues a TCO without meeting the core criteria, this could also result in administrative penalties or the need to rectify the decision. The specific penalties would depend on the broader regulatory context and any additional legislative provisions that may apply.