EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0901909
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 valve assembly on 20 January 2009.
Instrument
TCO No 0901909 was made on 14 April 2009. It declares that those certain valve assembly 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. 0901909 is taken to have come into force on 20 January 2009.
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. 0901909, made under the Customs Act 1901, was introduced to address the need for tariff concessions on specific imported goods, in this case, certain valve assemblies. This legislation was enacted in 2009 by the Chief Executive Officer of Customs, following an application from Bluescope Steel Limited on 20 January 2009. The primary policy objective behind this instrument is to ensure that imported goods for which no substitutable domestic products exist benefit from reduced or no customs duty, thereby encouraging competitive imports and potentially lowering costs for consumers. The instrument came into effect on the date the application was lodged, 20 January 2009, and no submissions opposing the concession were received. Importantly, the instrument does not disadvantage any existing rights holders or impose new liabilities, and it allows importers to apply for duty refunds on affected goods imported since the effective date.
Scope and Application
The Tariff Concession Instrument No. 0901909, established under the Customs Act 1901, applies to entities seeking a Tariff Concession Order (TCO) for specific goods, enabling a lower rate of customs duty. This applies to goods not produced in Australia in the ordinary course of business and for which no substitutable goods are available domestically. The instrument primarily benefits entities such as Bluescope Steel Limited, which applied for the concession for certain valve assemblies, resulting in a duty rate reduction from 5% to free. The geographic scope of the Act is national, given its federal nature, thereby extending its application across all states and territories within Australia. While the Act broadly applies to goods imported into Australia, it excludes certain goods specified under section 269SJ of the Customs Act 1901, such as those that cannot be subject to a TCO. The instrument's application can be further refined through subordinate legislation, allowing the Chief Executive Officer of Customs to make detailed regulations as necessary.
Key Provisions
The key provisions of the Tariff Concession Instrument No. 0901909, which amends the Customs Act 1901, relate to the application and making of Tariff Concession Orders (TCOs) (sections 269C, 269F, 269P). Section 269F of the Act allows an individual to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO is satisfied that the application is valid and meets the core criteria, they must make a written order declaring the goods are subject to a specified rate of duty (section 269P(3)). In this case, Instrument TCO No. 0901909 declares that certain valve assemblies are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, resulting in a free rate of duty.
The Act imposes certain obligations on both the applicant and the CEO. The applicant must ensure their application is valid and meets the core criteria, particularly that no substitutable goods are produced in Australia (section 269C). The CEO has the responsibility to decide whether an application meets the core criteria and to make a written order if satisfied (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who may have reasons to oppose the TCO (subsection 269K(1)). In this instance, no submissions were received.
Breaching the requirements of the Customs Act 1901 or any TCO may result in various consequences. Under section 269P(4) of the Act, the CEO has the authority to cancel a TCO if it is found that the order was made in error or if circumstances change such that the core criteria are no longer met. While the explanatory statement does not detail specific offences or penalties, general provisions of the Customs Act 1901 and associated regulations may apply. These could include fines or imprisonment for offences such as providing false information in an application, contravening TCO terms, or other breaches of customs regulations. The maximum penalties will depend on the specific offence and the provisions of the relevant legislation.