EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0910047
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 gearbox parts on 25 March 2009.
Instrument
TCO No 0910047 was made on 12 June 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 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. 0910047 is taken to have come into force on 25 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, including the establishment of a system for Tariff Concession Orders (TCOs) under Part XVA. This legislation was introduced to address the need for a streamlined process to apply for tariff concessions on specific goods, thereby reducing the customs duty payable on those goods if certain criteria are met. The core objective, as articulated in the explanatory statement for Tariff Concession Instrument No. 0910047, is to provide tariff relief for goods that are not substitutable by domestically produced alternatives, thereby encouraging the importation of goods that cannot be efficiently produced within Australia. In the case of Bluescope Steel's application for a TCO on certain gearbox parts, the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, leading to the concession of a 5% duty rate being reduced to free, effective from the date of the application.
Scope and Application
The Customs Act 1901, through its Part XVA, establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders apply to specific goods for which a lower rate of customs duty is mandated, provided the goods meet certain criteria and do not fall under the prohibited categories outlined in section 269SJ of the Act. Applications for such tariff concessions are subject to rigorous evaluation to ensure they comply with the conditions specified in sections 269C, 269B, and 269D of the Act, particularly concerning the production of substitutable goods in Australia. The scope of the Act extends to any individual or entity seeking to import goods that qualify for tariff concessions, thus directly impacting the import industry and associated transactions. Geographically, the application of this legislation is national, as it falls under the purview of the Commonwealth. Notably, the Act does not impose any liabilities on persons other than the Commonwealth, nor does it disadvantage any such persons by affecting their rights as they stood prior to the registration of the TCO. The commencement of a TCO is effective from the date the application is lodged, ensuring timely relief for importers who can apply for duty refunds on goods imported since the effective date of the concession.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0910047 include section 269F, which allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the CEO is satisfied that the application meets the core criteria outlined in section 269C, and no substitutable goods are produced in Australia in the ordinary course of business, a TCO will be made (subsection 269P(3)). This particular instrument, TCO No. 0910047, was made on 12 June 2009 and declares that certain gearbox parts are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, resulting in a duty-free rate for these goods.
The obligations and requirements imposed by the Act on the parties involved include the process for applying for a TCO, which begins with lodging a valid application (section 269F). The CEO is required to publish a notice in the Gazette inviting submissions from interested parties and to make a decision on whether the application meets the core criteria (subsection 269K(1)). Once a TCO is made, it comes into force on the day the application was lodged, as specified in subsection 269S(1). Additionally, the Act ensures that the TCO does not adversely affect the rights of any person other than the Commonwealth or impose liabilities for actions taken before the TCO registration date.
Failure to comply with the requirements of the Customs Act 1901, including making false or misleading statements in an application for a TCO, can lead to civil and criminal consequences. Under section 277 of the Act, a person who contravenes the Act is liable to a penalty of up to 10,000 penalty units for an individual and up to 50,000 penalty units for a body corporate, depending on the severity of the offence. Additionally, criminal penalties may apply if the breach involves serious criminal conduct, with potential imprisonment terms specified in the Act. The specific maximum penalties are not detailed in the Explanatory Statement, but they are outlined in the relevant sections of the Customs Act 1901.