EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0844575
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 applied for a TCO in respect of certain induction coil on 19 December 2008.
Instrument
TCO No 0844575 was made on 13 March 2009. It declares that those certain induction coil 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. 0844575 is taken to have come into force on 19 December 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. 0844575, enacted under the Customs Act 1901, was introduced to address the issue of tariff concessions for specific goods by providing a lower rate of customs duty. This instrument allows for the application of tariff concession orders (TCO) for goods that are not substitutable by any goods produced in Australia in the ordinary course of business. The enacting body for this instrument is the Chief Executive Officer of Customs (CEO) who is responsible for determining whether an application for a TCO meets the specified criteria, as outlined in the Act. The objective of this legislation is to provide tariff relief for certain goods, such as those applied for by Bluescope Steel, which in this case were certain induction coils, by offering a free rate of duty instead of the general rate of 5%.
The instrument was made on 13 March 2009, and it is taken to have come into force on the date of the application, 19 December 2008. This TCO ensures that the rights of importers are beneficially affected and that they can apply for a refund of duty on goods imported since the effective date of the concession. Importantly, the TCO does not impose any liabilities on any person and does not affect the rights of any person as at the date of registration.
Scope and Application
The Tariff Concession Order No. 0844575 under the Customs Act 1901 applies specifically to the goods known as certain induction coils, as requested by Bluescope Steel. The application for this tariff concession was lodged on 19 December 2008, and the order was made on 13 March 2009. The order came into effect on the date the application was lodged, which is 19 December 2008. This instrument is applicable to the industry involved in the production and importation of these specific goods, ensuring that they are eligible for a tariff concession. The geographic reach of this Act applies nationally, as it is a Commonwealth Act. The Act does not disadvantage any person or impose liabilities on any person except the Commonwealth. It is important to note that the application process includes a public notice inviting submissions, although none were received in this instance. The Act allows for the extension or restriction of application through subordinate instruments, ensuring flexibility in managing tariff concessions.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) relevant to Tariff Concession Orders (TCOs) include sections 269C, 269F, and 269P. Section 269F allows an application to be made to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the CEO is satisfied that the application is valid and meets the core criteria, a TCO can be made under section 269P. Section 269C 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. A TCO declares that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, thereby applying a lower rate of customs duty.
The Act imposes obligations on applicants and the CEO. An applicant must ensure that the goods for which a TCO is sought do not have substitutable goods produced in Australia in the ordinary course of business. The CEO must review the application to determine if it meets the core criteria, and if so, make a written order (TCO) specifying the applicable tariff item. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made.
The Act does not explicitly state any offences, penalties, or civil/criminal consequences for breach of the TCO provisions. However, if the CEO determines that a TCO should not have been made, the TCO can be revoked under section 269R of the Act, and any associated refunds of duty can be recovered. Additionally, if a TCO is found to have been incorrectly applied, leading to improper tariff concessions, the person responsible may face penalties under other relevant sections of the Customs Act or related legislation for misrepresentation or fraudulent behaviour.