EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0910937
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 air fan parts on 01 April 2009.
Instrument
TCO No 0910937 was made on 29 June 2009. It declares that those certain air 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. 0910937 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 amended to include the Tariff Concession Instrument No. 0910937, enacted in 2009. This legislative instrument was introduced to address the issue of providing tariff concessions for specific goods, thereby facilitating trade by reducing customs duties on certain imports. The instrument was enacted by the Australian Parliament, aiming to streamline the process for tariff concessions and ensure that such concessions are granted only when appropriate, maintaining the integrity of the Australian production sector by limiting concessions to goods that are not produced domestically. The instrument establishes a clear procedure for applications and the conditions under which tariff concessions can be granted, ensuring that the application process is both transparent and fair.
Scope and Application
The Tariff Concession Instrument No. 0910937 applies to the specified air fan parts which are subject to the concessions outlined in the Customs Act 1901. This Act governs the application and administration of the instrument, which was initiated by Bluescope Steel on 01 April 2009. The application process involved satisfying the Chief Executive Officer of Customs (CEO) that no substitutable goods were produced in Australia at the time the application was lodged. The geographic and jurisdictional reach of this legislation is national, falling under the purview of the Commonwealth as per the Customs Act 1901. The instrument exempts the specified air fan parts from the general rate of duty, which is 5%, and instead applies a rate of duty that is free. Notably, this concession does not impose any liabilities on persons other than the Commonwealth and does not affect any existing rights as of the date of registration. Importers of these goods will benefit from the ability to apply for a refund of duty on goods imported since the TCO came into force on 01 April 2009. The instrument extends its application through subordinate instruments such as the Customs Tariff Act 1995 and the Customs Regulations 1995.
Key Provisions
The primary operative sections of this legislation pertain to the making of Tariff Concession Orders (TCOs) under the Customs Act 1901 (section 269F). Section 269C outlines the core criteria that a TCO application must meet, specifically that no substitutable goods were produced in Australia on the day the application was lodged. Section 269B further clarifies the definitions of key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods." Once the Chief Executive Officer of Customs (CEO) is satisfied that the application meets these core criteria, they are required to make a written order under subsection 269P(3) that specifies the goods subject to the concession and the applicable rate of duty, which in this case is free of charge for certain air fan parts.
The obligations imposed by this Act on the parties primarily revolve around the application process for TCOs. The applicant must ensure that their application adheres to the conditions specified in section 269C, and the CEO must publish a notice in the Gazette (subsection 269K(1)) inviting any interested parties to submit objections if they believe the TCO should not be granted. The CEO must also ensure that no substitutable goods were produced in Australia on the day the application was lodged. If the CEO determines that the application meets the criteria, they must proceed to issue the TCO as per subsection 269P(3). The TCO will come into effect on the day the application was lodged (subsection 269S(1)), and it will not affect any pre-existing rights or impose any liabilities on persons other than the Commonwealth.
There are no specific offences outlined in this legislation; however, non-compliance with the requirements for issuing or applying for a TCO could potentially lead to civil or administrative consequences. For example, if an applicant submits a false statement in their TCO application, they could face legal action under other provisions of the Customs Act 1901. Additionally, the CEO has the authority to revoke a TCO if it is found that the core criteria were not met at the time of application. The penalties for breaches of the Customs Act 1901 can vary significantly depending on the nature and severity of the offence, but they can include fines and imprisonment under the relevant sections of the Act.