EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0906989
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 gas scrubber parts on 27 February 2009.
Instrument
TCO No 0906989 was made on 22 May 2009. It declares that those certain gas scrubber 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. 0906989 is taken to have come into force on 22 May 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. 0906989, enacted in 2009, is an instrument under the Customs Act 1901 designed to address the need for tariff concessions on specific goods, allowing for a lower rate of customs duty to be applied. This instrument was introduced to streamline the process for businesses seeking tariff relief on imported goods that are not produced domestically. The instrument was created by the Chief Executive Officer of Customs, in accordance with the legislative framework provided by the Customs Act 1901, which empowers the CEO to make such orders when certain criteria are met. The policy objective behind this legislation is to provide economic relief and competitive advantage to businesses by reducing the cost of importing certain goods, thereby facilitating trade and supporting industry where local production does not currently exist.
Scope and Application
The Customs Act 1901 applies to the procedure and regulation of the importation and exportation of goods in Australia, allowing for the imposition and concession of customs duties. Part XVA of the Act provides the framework for Tariff Concession Orders (TCOs), which allow for the reduction or exemption of customs duties on specified goods. The Act applies to individuals and entities who import or export goods, as well as the industries involved in these activities. The geographic reach of the Act is national, covering all of Australia. The application of a TCO, as outlined in Tariff Concession Instrument No. 0906989, is limited to specific goods for which a concession has been granted by the Chief Executive Officer of Customs. This particular instrument pertains to certain gas scrubber parts, reducing their duty from 5% to free. The Act does not apply to goods specified in section 269SJ, which are ineligible for tariff concessions. The application and scope of the Act can be extended or modified through subordinate instruments, such as regulations or further orders made by the CEO.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0906989 under the Customs Act 1901 (section 269C, 269B, and 269P) establish the framework for Tariff Concession Orders (TCOs). These sections require that for a TCO to be made, the Chief Executive Officer of Customs (CEO) must be satisfied that the application for a TCO meets the core criteria, specifically that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied, they must make a written order (TCO) specifying the goods and the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that apply to these goods.
The obligations imposed by the Act on the CEO and applicants include ensuring that the application meets the core criteria as outlined in section 269C, verifying that the goods in question are not specified in section 269SJ, and publishing a notice in the Gazette inviting any interested parties to submit objections to the TCO if they believe it should not be made. The CEO must also consider any submissions received and make a decision based on the merits of the application and any submissions received.
In terms of consequences for breach, the Act does not explicitly detail specific offences, penalties, or consequences for failing to comply with the provisions of a TCO. However, non-compliance with the Customs Act 1901 in general may result in civil or criminal penalties. For instance, knowingly making a false statement or representation to an officer of Customs could lead to a fine of up to 10,000 penalty units or imprisonment for up to two years, or both, under section 272 of the Act. Additionally, any misuse or misunderstanding of the TCO could lead to disputes or litigation, with potential for the party found in breach to face financial penalties, legal costs, and other civil consequences as determined by the court.