EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0910069
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 couplings on 25 March 2009.
Instrument
TCO No 0910069 was made on 12 June 2009. It declares that those certain parts planetary gearbox couplings 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. 0910069 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 Parliament of Australia, provides for a system of tariff concession orders (TCOs) that can be applied for by individuals or businesses to secure reduced customs duty rates on certain imported goods. This system addresses the gap in the customs duty regime by allowing for the recognition of specific goods that are not produced domestically, thereby encouraging imports and potentially lowering costs for consumers and businesses. The Tariff Concession Instrument No. 0910069 was introduced to address the specific need of Bluescope Steel, which sought reduced customs duties on certain parts planetary gearbox couplings. This particular instrument was made on 12 June 2009, declaring these goods eligible for duty-free treatment, effective from the date of the application on 25 March 2009. The objective of this measure is to ensure that importers can benefit from the tariff concessions without incurring any liabilities or disadvantages as a result of the TCO.
Scope and Application
The Tariff Concession Instrument No. 0910069, made under the Customs Act 1901, applies to the specific goods identified in the instrument, namely certain parts of planetary gearbox couplings. This legislation is applicable to the person or entity that applied for the tariff concession order, Bluescope Steel, and potentially to any importers of these specific goods. The Act facilitates the application process whereby the Chief Executive Officer of Customs can grant lower customs duty rates for goods specified in a Tariff Concession Order if certain criteria are met. These criteria include the absence of substitutable goods being produced in Australia at the time the application is lodged. Geographically, this Act operates under the Commonwealth jurisdiction, impacting trade practices and customs duties nationally. The instrument does not impose any disadvantages or liabilities on individuals or entities other than the Commonwealth, and it does not affect any pre-existing rights or obligations. The commencement date of the tariff concession aligns with the date the application was lodged, ensuring that any duties paid prior to the concession are not retrospectively affected.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0910069 under the Customs Act 1901 (sections 269C, 269B, 269D, 269E, 269F, 269P, 269K, and 269S) detail the process for making Tariff Concession Orders (TCOs). Section 269F allows for applications to be made to the Chief Executive Officer (CEO) of Customs for TCOs on specific goods, provided those goods are not listed in section 269SJ, which excludes certain goods from eligibility. If the CEO determines that the application meets the core criteria, notably that no substitutable goods are produced in Australia (section 269C), they are required to issue a TCO (section 269P(3)). These sections also define key terms such as 'substitutable goods' and 'ordinary course of business', clarifying the scope of the concession.
The obligations under this legislation are primarily on the CEO of Customs. They must evaluate applications against the criteria set forth in the Act, ensuring that the goods in question do not have substitutable Australian alternatives. The CEO must also publish notices in the Gazette inviting submissions from the public if they consider the application valid (section 269K(1)). In this instance, the CEO received no submissions opposing the TCO for planetary gearbox couplings, leading to the issuance of TCO No. 0910069. Additionally, the Act mandates that TCOs do not retroactively affect the rights of any party other than the Commonwealth, ensuring that existing rights and duties are preserved for those who imported goods before the TCO's effective date.
The legislation includes provisions for penalties and consequences for breaches, although specific penalties are not detailed in this particular TCO. Under the broader framework of the Customs Act 1901, breaches of customs regulations typically incur civil and/or criminal penalties. Civil penalties can include fines up to several thousand Australian dollars, while criminal penalties can result in fines and imprisonment. However, the explanatory statement for TCO No. 0910069 does not specify particular penalties for non-compliance with this TCO. Importers are encouraged to apply for refunds of duties paid on eligible goods since the TCO's effective date, as outlined in the Customs (Tariff) Regulations 1998 (paragraph 126(1)(r)).