EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0844883
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 Pty Ltd applied for a TCO in respect of certain induction motors cooler fan on 22 December 2008.
Instrument
TCO No 0844883 was made on 20 March 2009. It declares that those certain induction motors cooler fan 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. 0844883 is taken to have come into force on 22 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 Customs Act 1901, enacted by the Parliament of Australia, provides a framework for the administration of customs and excise duties. The Act allows for the creation of Tariff Concession Orders (TCO) under Part XVA, which can reduce or eliminate customs duties on certain goods. The instrument F2009L01374 (Tariff Concession Instrument No. 0844883) addresses the specific issue of providing tariff concessions for certain induction motors cooler fans. This was introduced to address the gap where such goods, not produced in Australia and without substitutable domestic alternatives, were subject to higher customs duties, potentially disadvantaging their importation and use in Australia. The policy objective is to encourage the importation of goods that are not produced locally, thereby promoting competition and potentially lowering costs for consumers and businesses.
Scope and Application
The Tariff Concession Instrument No. 0844883, made under the Customs Act 1901, applies to individuals and entities seeking tariff concessions for specific goods, in this case, certain induction motors cooler fans. The legislation specifically targets those who apply for tariff concession orders (TCO) from the Chief Executive Officer of Customs (CEO) when it is established that no substitutable goods are produced in Australia in the ordinary course of business. The geographic reach of this Act is national, as it operates within the framework of the Commonwealth of Australia. The Act excludes certain goods from the scope of TCOs, as outlined in section 269SJ of the Customs Act 1901, and mandates that if the CEO determines an application meets the core criteria, a TCO must be issued, as specified in section 269F of the Act. The Act also outlines that the rights of importers are beneficially affected, allowing them to apply for a refund of duty on imported goods since the day the TCO is taken to have come into force.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 0844883 under the Customs Act 1901, involve the process of making a Tariff Concession Order (TCO) (sections 269C, 269P, and 269S). These sections mandate that the Chief Executive Officer (CEO) of Customs must make a TCO if satisfied that the application meets the core criteria, which include verifying that no substitutable goods are produced in Australia (section 269C). Once the CEO is satisfied, they must declare in a written order that the goods specified in the TCO application are subject to a prescribed item in the Customs Tariff Act 1995 (section 269P). For the particular case of Bluescope Steel Pty Ltd's application for a TCO on certain induction motors cooler fans, the instrument declares that these goods are subject to item 50 of Schedule 4 to the Tariff, resulting in a duty rate of free instead of the general rate of 5%.
The Act imposes specific obligations on the CEO of Customs, primarily ensuring that TCO applications are processed in a transparent and fair manner. This includes publishing a notice in the Gazette inviting submissions from any person who might have reasons why a TCO should not be made (subsection 269K(1)). In this case, the CEO published a notice but received no submissions. The CEO must also ensure that the TCO comes into force on the day the application is lodged (subsection 269S(1)), which for this TCO was 22 December 2008.
Additionally, the Act ensures that the rights of persons other than the Commonwealth are not adversely affected by the TCO. Specifically, it states that the TCO does not impose any liabilities on any person (subsection 269S(1)), and it does not disadvantage anyone or impose liabilities for actions taken before the TCO's registration date. Importers of the goods subject to the TCO can benefit by applying for a refund of duty on goods imported since the TCO's effective date under paragraph 126(1)(r) of the Regulations.
There are no explicit offences, penalties, or civil/criminal consequences detailed in the Act for breaches related to the TCO process itself. However, any improper conduct related to the application or misuse of the TCO could potentially lead to other legal consequences under different sections of the Customs Act 1901 or other relevant legislation. For example, fraudulent claims for duty refunds could result in penalties under the Customs Act. The specific maximum penalties for such offences would depend on the nature and severity of the breach, as outlined in other sections of the Act and related regulations.