EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0908457
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 on 12 March 2009.
Instrument
TCO No 0908457 was made on 29 May 2009. It declares that those certain planetary reduction gearbox 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. 0908457 is taken to have come into force on 12 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, established a framework within which Tariff Concession Orders (TCOs) could be issued by the Chief Executive Officer of Customs. This Act was designed to address the need for tariff concessions on specific goods that are not produced domestically and for which a lower rate of customs duty would be beneficial. TCO No. 0908457 was introduced to provide tariff concessions on certain planetary reduction gearboxes, recognising that these goods were not produced in Australia and hence eligible for a lower duty rate, ultimately benefiting importers by potentially reducing their duty costs. The policy objective, as stated in the explanatory statement, was to ensure that the application for a TCO was met with the core criteria, including the absence of substitutable goods produced in Australia, thus facilitating a tariff concession that aligns with the broader economic policy of promoting trade and reducing costs for importers.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the application of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This Act allows for a reduced rate of customs duty on goods that are subject to a TCO. The Act applies to any person or entity that may apply for a TCO, provided the application does not pertain to goods specified in section 269SJ, which lists those goods that cannot be subject to a TCO. The core criteria for a TCO application, as outlined in section 269C, must be met, meaning no substitutable goods can be produced in Australia in the ordinary course of business on the day the application is lodged. The geographic reach of this Act is national, as it is a Commonwealth Act, but it also interfaces with the Customs Tariff Act 1995 to determine duty rates. The Act does not disadvantage any person other than the Commonwealth and does not impose any liabilities on persons for actions taken before the TCO's registration. Subordinate instruments may extend or restrict the application of the Act but are not specified in this particular TCO context.
Key Provisions
The key provisions of the Tariff Concession Instrument No. 0908457, under the Customs Act 1901, primarily revolve around the application and approval of Tariff Concession Orders (TCOs) (sections 269F, 269C, 269B, 269D, 269E, 269P). These sections detail how and when a TCO can be applied for, the criteria that must be met for the application to be considered, and the process by which the Chief Executive Officer of Customs (CEO) decides whether to grant a TCO. Specifically, section 269F allows any person to apply for a TCO for certain goods, provided those goods are not specified in section 269SJ of the Act. If the application meets the core criteria, as outlined in section 269C, which essentially requires that no substitutable goods were produced in Australia on the day the application was lodged, the CEO must issue a TCO (section 269P).
The obligations imposed by the Act on the parties involved are primarily on the applicant and the CEO. The applicant must ensure their application complies with the legislative requirements, particularly that the goods in question do not have substitutable equivalents produced in Australia. The CEO, upon receiving an application, is obliged to determine if the application meets the core criteria and, if so, to issue a TCO (subsection 269K(1)). This process includes publishing a notice in the Gazette inviting any interested parties to submit their views on why the TCO should not be granted, although in this case, no submissions were received.
In terms of penalties and consequences for breach, the Customs Act 1901 does not explicitly detail penalties for failing to comply with the provisions related to TCOs. However, any failure to adhere to the conditions or misrepresent information in an application could potentially lead to the denial of a TCO and, in more severe cases, could be subject to penalties under other sections of the Customs Act for offences related to customs duty and fraud. The Act ensures that the rights of individuals and entities are not adversely affected by the issuance of a TCO, protecting them from any liabilities arising from actions taken before the TCO was registered (subsection 269S(1)).