EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0903369
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 gearbox parts on 02 February 2009.
Instrument
TCO No 0903369 was made on 24 April 2009. It declares that those certain gearbox 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 10%. 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. 0903369 is taken to have come into force on 02 February 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 Customs Act 1901, enacted by the Parliament of Australia, includes a scheme that enables the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs). This scheme was introduced to address the need for a mechanism to reduce customs duty on certain goods, thereby supporting industry competitiveness and economic growth. Specifically, the Act allows for the application of lower rates of customs duty on goods that are subject to a TCO, provided they meet certain criteria such as the absence of substitutable goods produced in Australia. The policy objective behind the TCO scheme is to facilitate the import of goods that are not domestically produced, thereby encouraging trade and economic activity.
Tariff Concession Instrument No. 0903369 was issued on 24 April 2009, following an application by Bluescope Steel Limited for certain gearbox parts. The instrument declares that these specific parts are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with a duty rate of free, as no substitutable goods were produced in Australia. This decision was made after considering the core criteria set out in the Customs Act, and no objections were received during the consultation period. The TCO is effective from 02 February 2009, the date the application was lodged, and it does not affect the rights of any person as at the date of registration.
Scope and Application
The Tariff Concession Instrument No. 0903369 under the Customs Act 1901 applies to individuals or entities that seek tariff concessions for specific goods entering Australia, provided the application adheres to the criteria outlined in the Act. The Act applies to the Chief Executive Officer of Customs, who is responsible for assessing applications for Tariff Concession Orders (TCOs) and determining whether the goods in question are eligible for a reduced rate of customs duty. The TCO specifically applies to certain gearbox parts for which Bluescope Steel Limited applied on 02 February 2009. The geographic reach of the Act is national, affecting all jurisdictions within Australia, as it pertains to the importation of goods and the associated customs duties. The Act excludes certain goods from being eligible for a TCO, as specified in section 269SJ of the Act. Additionally, the application process requires the CEO to ensure that no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269D, 269E, and 269F of the Act. The instrument does not disadvantage any person other than the Commonwealth and does not impose any liabilities on individuals or entities other than the Commonwealth.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0903369 under the Customs Act 1901 (section 269F) detail the process for applying for a Tariff Concession Order (TCO) and the conditions under which the Chief Executive Officer (CEO) of Customs must make such an order (section 269P(3)). Section 269C stipulates that a TCO application is eligible if, on the day of application, no substitutable goods were produced in Australia in the ordinary course of business. The definition of "substitutable goods" (section 269D) and "ordinary course of business" (section 269E) are crucial in determining the eligibility of an application.
The obligations imposed by the Act on the CEO include assessing whether the application meets the core criteria (section 269C) and, if satisfied, making a written TCO (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette (subsection 269K(1)), inviting any interested parties to submit reasons why the TCO should not be made. The CEO’s role also involves ensuring that the rights of individuals are not adversely affected by the issuance of the TCO (subsection 269S(1)), and facilitating the process for importers to apply for a refund of duty (paragraph 126(1)(r) of the Regulations).
Under this legislation, breaches of the conditions specified in the TCO, such as attempting to import goods that do not meet the criteria for the concession, may result in civil or criminal penalties. The exact penalties are not detailed within the explanatory statement but generally, violations of customs regulations can lead to fines, imprisonment, or both, depending on the severity and intent of the breach. The maximum penalties for customs-related offences can vary widely, but significant breaches can attract substantial fines and lengthy prison sentences.
In summary, Tariff Concession Instrument No. 0903369 provides a framework for reducing customs duty on certain goods through the issuance of TCOs, subject to strict eligibility criteria and procedural obligations. The Act also ensures that the rights of importers are protected and that the process is transparent, allowing interested parties to voice their concerns. Breaches of the TCO terms can result in serious civil and criminal consequences, highlighting the importance of compliance with the specified conditions.