EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0910068
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 parts planetary gearbox torque limiters on 25 March 2009.
Instrument
TCO No 0910068 was made on 19 June 2009. It declares that those certain parts planetary gearbox torque limiters 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. 0910068 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 Tariff Concession Instrument No. 0910068 was enacted in 2009 as part of the Customs Act 1901. This legislative instrument was introduced to address the need for tariff concessions that can provide relief to certain imported goods, in this case, specific parts of planetary gearbox torque limiters, which were subject to a lower rate of customs duty under the scheme set up by the Act. This was achieved by allowing the Chief Executive Officer of Customs to make Tariff Concession Orders if certain conditions, such as the absence of substitutable goods produced in Australia, were met. The policy objective behind this legislation is to facilitate trade by reducing the cost of importing certain goods, thereby potentially lowering costs for businesses and consumers in Australia.
The instrument was enacted by the relevant legislature, with the Customs Act 1901 being the primary legislative authority. The process involved Bluescope Steel applying for a tariff concession on 25 March 2009, which was subsequently approved by the CEO of Customs, leading to the issuance of Instrument TCO No. 0910068 on 19 June 2009. The concession resulted in the general rate of duty on these specific goods being reduced from 5% to free, effective from the date of the application. The rights of importers were positively affected, as they could apply for refunds of duties paid on these goods since the date the concession was taken to have come into force. Importantly, the new tariff concession did not disadvantage any existing parties or impose new liabilities on them.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides the framework for Tariff Concession Orders (TCOs), which can be applied for by any person to the Chief Executive Officer of Customs (CEO). The CEO is responsible for determining whether the application meets the core criteria for a TCO, which includes assessing whether substitutable goods are produced in Australia in the ordinary course of business. If the CEO determines that no such goods exist, they must then issue a written TCO, which applies a prescribed lower rate of customs duty on the specified goods. The application of TCOs does not disadvantage any person, including importers, who may benefit from the reduced duty rates and can apply for refunds on duties paid on goods imported since the effective date of the TCO. The application process also includes a public consultation period, although no submissions were received in response to the notice for this particular TCO. The application and issuance of TCOs are further governed by the Customs Tariff Act 1995, with the TCO coming into force on the date the application is lodged.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0910068 under the Customs Act 1901 (section 269F) allow for the application of Tariff Concession Orders (TCOs) to reduce customs duty on specified goods. When Bluescope Steel applied for a TCO for certain parts of planetary gearbox torque limiters (section 269C), the Chief Executive Officer of Customs (CEO) was required to determine if the application met the core criteria, which includes verifying that no substitutable goods were produced in Australia in the ordinary course of business (section 269D and section 269E). If these criteria are met, the CEO must issue a written TCO (section 269P(3)).
The Act imposes specific obligations on the CEO, who must ensure that the application meets the core criteria before issuing a TCO. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be granted (subsection 269K(1)). In this case, no submissions were received. Furthermore, the TCO is deemed to come into effect on the day the application was lodged (subsection 269S(1)), thus Bluescope Steel's TCO is effective from 25 March 2009. The TCO does not affect any rights or impose any liabilities on persons other than the Commonwealth in respect of actions taken prior to the TCO's registration.
Breaches of the requirements under the Customs Act 1901 may lead to civil or criminal consequences. Section 269H of the Act states that any person who makes a false or misleading statement in an application for a TCO commits an offence. The maximum penalty for this offence is 10,000 penalty units or imprisonment for five years, or both. Additionally, any person who knowingly or recklessly imports goods that do not qualify for the tariff concession may face penalties under the Customs Act, including fines and potential imprisonment. It is crucial for applicants and importers to comply with the Act to avoid these legal consequences.