EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0910929
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 fan parts on 01 April 2009.
Instrument
TCO No 0910929 was made on 29 June 2009. It declares that those certain fan 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. 0910929 is taken to have come into force on 01 April 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 was enacted to facilitate the administration of customs and excise duties and the control of imports and exports. One of the critical tools introduced under this Act is the Tariff Concession Order (TCO), which allows for the reduction of customs duty on specific goods under certain conditions. The Tariff Concession Instrument No. 0910929, issued in 2009, exemplifies the application of this scheme. This instrument was introduced to address the specific need of Bluescope Steel, which sought a concession on certain fan parts to ensure they could compete effectively without the burden of high customs duties. The Australian Government, through the Chief Executive Officer of Customs, reviewed the application and, finding that no substitutable goods were produced in Australia, granted the concession, resulting in a zero percent duty rate on the specified goods, down from the general rate of 5%. This action was taken to ensure that Australian businesses could operate competitively without unnecessary financial burdens imposed by customs duties on specific imports.
Scope and Application
The Tariff Concession Order No. 0910929 under the Customs Act 1901 applies to specific fan parts for which Bluescope Steel applied on April 1, 2009. The order is designed to provide tariff concessions, effectively reducing the customs duty rate from the general rate of 5% to free, provided that the fan parts are imported and not substitutable with any goods produced in Australia in the ordinary course of business. The application of this concession hinges on the core criteria set out in section 269C of the Customs Act 1901, which requires the Chief Executive Officer of Customs to be satisfied that no substitutable goods are produced domestically. This order, made on June 29, 2009, aims to benefit importers by allowing them to apply for a refund of duty on goods imported since the day the TCO is deemed to have come into force, without imposing any liabilities on any person. The order has no retroactive effect and does not disadvantage any person other than the Commonwealth.
Key Provisions
The main operative sections of this legislation, specifically the Tariff Concession Order (TCO) No. 0910929, relate to the Customs Act 1901 (sections 269C, 269F, 269P(3), and 269K(1)) and the Customs Tariff Act 1995 (Schedule 4, item 50). Section 269F of the Customs Act permits an application for a TCO to be made to the Chief Executive Officer (CEO) of Customs. If the CEO is satisfied that the application meets the core criteria specified in section 269C, which includes the condition that no substitutable goods were produced in Australia at the time of application, the CEO must make a written order (section 269P(3)). This order then specifies a lower rate of customs duty for the goods in question. In this case, item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, effectively making the duty on the fan parts free, down from the general rate of 5%.
The obligations and requirements imposed by this legislation on the parties it governs primarily involve the application and assessment process for a TCO. The CEO of Customs must ensure that any application for a TCO is assessed against the criteria in section 269C of the Customs Act. This includes verifying that no substitutable goods were being produced in Australia at the time of application. Additionally, the CEO must publish a notice in the Gazette (subsection 269K(1)) inviting any interested parties to submit reasons why the TCO should not be made. In this instance, no submissions were received. Once a TCO is made, it is effective from the date the application was lodged, ensuring that the rights of importers are preserved and that they can apply for a refund of duty on goods imported since the effective date (paragraph 126(1)(r) of the Regulations).
The legislation also outlines specific consequences for non-compliance or breaches. While the explanatory statement does not detail specific offences under the Customs Act, it is implied that any misrepresentation or incorrect application could lead to legal action. Typically, breaches of the Customs Act may result in criminal penalties, including fines and imprisonment, as well as civil penalties for incorrect declarations or fraudulent activities. The precise penalties would depend on the specific nature and severity of the breach, as outlined in the relevant sections of the Customs Act and any related regulations.