EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0908300
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 planetary reduction gearbox parts on 11 March 2009.
Instrument
TCO No 0908300 was made on 29 May 2009. It declares that those certain planetary reduction 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 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. 0908300 is taken to have come into force on 11 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for the regulation of customs and excise through the establishment of a tariff system, among other things. It was introduced to address the need for a structured approach to managing the import and export of goods, ensuring compliance with regulatory standards and facilitating trade. One of its provisions, under Part XVA, allows for Tariff Concession Orders (TCOs) to be made by the Chief Executive Officer of Customs (CEO) to provide relief from customs duty on certain goods. This mechanism was established to support domestic industries by reducing the cost of imported goods that do not have Australian alternatives. In the case of Tariff Concession Instrument No. 0908300, the CEO made a TCO in response to an application from Bluescope Steel for certain planetary reduction gearbox parts, setting a free rate of duty on these goods as no substitutable products were being produced in Australia. The process of making this concession involved public consultation and was implemented without retroactive effect, protecting the rights of existing parties while providing future benefits to importers of the specified goods.
Scope and Application
The Tariff Concession Instrument No. 0908300 under the Customs Act 1901 applies to any person who may seek a tariff concession order (TCO) for specific goods from the Chief Executive Officer of Customs (CEO). This act is primarily concerned with the reduction or elimination of customs duty on certain goods, contingent upon the CEO's determination that no substitutable goods are produced in Australia. The geographic scope of this legislation is national, affecting all individuals and entities engaged in the importation of goods within Australia. The Act allows for the CEO to make written orders that apply prescribed tariff items, thus modifying the duty rates specified in the Customs Tariff Act 1995. Notably, the TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on persons other than the Commonwealth. The CEO must publish a notice in the Gazette inviting submissions on the TCO application, though in this case, no submissions were received. The TCO in question, relating to certain planetary reduction gearbox parts, came into effect on 11 March 2009, the date the application was lodged.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0908300 (the Instrument) are sections 269C, 269P, and 269S, which outline the criteria for making a Tariff Concession Order (TCO) under the Customs Act 1901. Section 269C of the Act requires that a TCO application meets the core criteria, which includes the condition that no substitutable goods were produced in Australia on the day the application was lodged (section 269C(1)(a)). Section 269P directs the Chief Executive Officer of Customs (CEO) to make a written order (a TCO) if satisfied that the application meets these criteria (section 269P(3)). Section 269S stipulates the commencement of a TCO, which is taken to have come into force on the day the application for the TCO was lodged (section 269S(1)).
The obligations imposed by the Instrument on the parties governed by it include the requirement for applicants to ensure their applications meet the core criteria set out in section 269C of the Customs Act. This involves providing evidence that no substitutable goods were produced in Australia on the day the application was lodged. The CEO, upon receiving a valid application, must publish a notice in the Gazette inviting submissions from any interested parties and then make a decision on whether to issue a TCO (section 269K). If the CEO is satisfied that the application meets the criteria, they must issue a written TCO as specified in section 269P.
There are no direct offences, penalties, or civil/criminal consequences outlined in the Instrument itself for breaches related to the making of a TCO. However, general provisions of the Customs Act 1901 and associated regulations may apply to cases of non-compliance or fraudulent activities. For example, section 126 of the Customs Act imposes penalties for making false or misleading statements, which could include fines or imprisonment. Additionally, section 126A of the Customs Act imposes a penalty of up to 10,000 penalty units for serious breaches, reflecting the seriousness of the offence.