EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0910175
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 steam boiler parts on 26 March 2009.
Instrument
TCO No 0910175 was made on 19 June 2009. It declares that those certain steam boiler 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. 0910175 is taken to have come into force on 26 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 for the regulation of customs and excise duties in Australia. Part XVA of the Act allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs), which can reduce the rate of customs duty on certain goods. Tariff Concession Instrument No. 0910175 was introduced to address the specific need of Bluescope Steel to obtain a tariff concession on certain steam boiler parts, which were not being produced in Australia and therefore qualified under the core criteria of the Act. The CEO was satisfied that no substitutable goods were produced domestically, leading to the issuance of the TCO on 19 June 2009, which reduced the duty rate from 5% to free. This instrument came into force on the date of the application, 26 March 2009, and does not disadvantage any person or impose new liabilities, while providing potential benefits to importers who may apply for duty refunds on imports since the effective date.
Scope and Application
The Tariff Concession Instrument No. 0910175 applies to the specific goods identified as certain steam boiler parts, which are subject to a Tariff Concession Order (TCO) under the Customs Act 1901. The Act applies to individuals or entities that are engaged in the importation of these specified goods, allowing them to benefit from a reduced rate of customs duty. The geographic reach of the Act is national, with the instrument being a part of the Commonwealth's customs legislation. The application of the TCO does not extend to goods that are listed in section 269SJ of the Customs Act 1901, which outlines those goods that cannot be subject to a TCO. Furthermore, the TCO does not affect the rights of any person in a way that disadvantages them or imposes liabilities for actions taken before the date of registration. The instrument also allows for potential amendments or extensions through subordinate instruments as needed to ensure compliance and fairness in its application.
Key Provisions
The main operative sections of the Customs Act 1901, particularly as relevant to Tariff Concession Orders (TCOs), are sections 269C, 269B, 269D, 269E, 269F, 269P, and 269SJ. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided the goods are not specified in section 269SJ, which lists those goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria outlined in section 269C, they must make a written order (a TCO) specifying that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. The CEO must also publish a notice in the Gazette inviting submissions on the application, as per section 269K(1).
The Act imposes several obligations on the parties it governs. Firstly, the CEO must ensure that any application for a TCO is assessed against the core criteria specified in section 269C. This includes verifying that no substitutable goods were produced in Australia on the day the application was lodged, with definitions for 'substitutable goods', 'goods produced in Australia', and 'ordinary course of business' provided in sections 269B, 269D, and 269E, respectively. Additionally, under section 269S(1), the CEO must ensure that any TCO is taken to have come into force on the day the application was lodged, meaning that any rights of the parties are determined as of that date.
Failure to comply with the requirements of the Customs Act 1901 or any associated regulations may lead to various offences and penalties. While the explanatory statement does not specify the exact penalties for non-compliance with the TCO provisions, general offences under the Customs Act can result in civil penalties, including fines up to the greater of $22,200 or three times the value of the dutiable goods, or criminal penalties, which can include imprisonment for up to two years, or both. The specific penalties would depend on the nature and severity of the breach.
In summary, the Customs Act 1901 outlines a clear process for the application and assessment of Tariff Concession Orders, with specific obligations placed on the CEO to ensure compliance with the criteria and timely publication of notices in the Gazette. The Act also sets out the commencement date for TCOs and ensures that the rights of parties are protected from adverse effects due to the registration of a TCO. Non-compliance with the Act or associated regulations may result in significant civil or criminal penalties.