EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0907328
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 suction pads and suction grippers on 03 March 2009.
Instrument
TCO No 0907328 was made on 29 June 2009. It declares that those certain suction pads and suction grippers 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. 0907328 is taken to have come into force on 03 March 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. 0907328 was enacted in 2009 under the Customs Act 1901 to provide tariff concessions for specific goods, in this case, certain suction pads and suction grippers. This instrument was introduced to address the gap in tariff concessions for goods that are not produced domestically and are not listed in the exclusions under section 269SJ of the Act. The enacting body for this instrument is the Chief Executive Officer of Customs (CEO), who is tasked with determining whether an application for a Tariff Concession Order (TCO) meets the core criteria outlined in the Act. The policy objective of this instrument is to reduce the customs duty on goods that are not produced in Australia, thereby potentially lowering costs for importers and consumers.
The Customs Act 1901 sets out a framework for the CEO to assess and approve TCO applications, provided that no substitutable goods are produced in Australia. In this instance, the CEO determined that Bluescope Steel's application for a TCO on certain suction pads and suction grippers met the criteria, resulting in the issuance of TCO No. 0907328. This order declares that these goods are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995, effectively reducing the duty rate from the general 5% to free. The instrument was published in the Gazette with an invitation for submissions, though none were received. The TCO came into force on the date of application, 3 March 2009, and benefits importers by allowing them to apply for duty refunds on imports since that date, without imposing any liabilities.
Scope and Application
The Customs Act 1901, through Part XVA, provides a framework for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs), which reduce the rate of customs duty on specific goods. These orders are applicable to any person or entity that imports goods eligible for a TCO, which must meet certain core criteria, including the absence of substitutable goods produced in Australia. This act applies across the Commonwealth of Australia and is not limited to specific states or territories. The application of TCOs does not affect the rights of any person as at the date of registration, thus protecting existing rights and interests. However, it specifically excludes certain goods as outlined in section 269SJ of the Act. The scope of the Act can be further extended or refined through subordinate instruments, though the primary legislation sets out the foundational criteria and process for TCOs.
Key Provisions
The Customs Act 1901 provides a framework for the application of Tariff Concession Orders (TCOs) which can reduce the customs duty on certain goods. The main sections of interest are section 269F, which allows for the application of a TCO, section 269C, which sets out the core criteria for a TCO application, and section 269P(3), which requires the CEO to make a TCO if the application meets the core criteria. In this case, Tariff Concession Instrument No. 0907328 was made on 29 June 2009, declaring that certain suction pads and suction grippers are subject to a duty-free rate under item 50 of Schedule 4 to the Customs Tariff Act 1995. This decision was made on the basis that no substitutable goods were produced in Australia at the time of the application.
The Act imposes certain obligations on the parties involved in the TCO process. For instance, section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any person who may have reasons to oppose the making of a TCO. In this instance, no submissions were received. Additionally, the CEO must ensure that the application meets the core criteria set out in section 269C, which involves confirming that no substitutable goods were produced in Australia on the day the application was lodged.
There are potential consequences for non-compliance with the Act. Section 269CA of the Customs Act 1901 provides for a maximum penalty of 2,000 penalty units for false or misleading statements in an application for a TCO. While no specific penalties are mentioned in the explanatory statement for the instrument, it is reasonable to infer that breaches of the Act could result in civil or criminal penalties. The Act also provides for the recovery of any overpaid duty in cases where a TCO is found to have been incorrectly applied.
Overall, the Tariff Concession Instrument No. 0907328 provides for a reduction in customs duty on certain suction pads and suction grippers, subject to the core criteria being met. The Act imposes obligations on the CEO to process applications and publish notices, while also providing for potential penalties for non-compliance. The instrument came into force on the date the application was lodged, 3 March 2009, and does not impose any liabilities on any person.