EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0917591
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 sinter plant gearbox parts on 25 May 2009.
Instrument
TCO No 0917591 was made on 25 September 2009. It declares that those certain sinter plant gearbox 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. 0917591 is taken to have come into force on 25 May 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, establishes a framework within which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs. These orders allow for a lower rate of customs duty on specified goods, provided certain criteria are met. The problem or gap this legislation addresses is the need for flexibility in customs duty rates to support industries where locally produced substitutes are not available, thereby promoting economic efficiency and competitiveness. The Tariff Concession Instrument No. 0917591, made on 25 September 2009, exemplifies this framework by applying to certain sinter plant gearbox parts, granting them a tariff concession that reduces their customs duty rate to free from the general rate of 5%. The policy objective is to encourage the import of specific goods that are not produced in Australia, facilitating the operations of businesses that rely on these imports.
Scope and Application
The Tariff Concession Instrument No. 0917591 applies to the specific goods, namely certain sinter plant gearbox parts, as determined by the Chief Executive Officer (CEO) of Customs under the Customs Act 1901. This Act governs the application and approval process for Tariff Concession Orders (TCOs), which are intended to provide a lower rate of customs duty on specified goods. The Act applies to entities or individuals seeking tariff concessions for goods that are not being produced domestically in the ordinary course of business and that have no substitutable goods available in Australia. The scope of the Act is national, as it is a Commonwealth legislation, thereby extending its jurisdiction across all states and territories of Australia. There are specific exclusions under section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The application of the Act may be further extended or restricted through subordinate instruments, such as the Customs Tariff Act 1995, which defines the rates of duty applicable to various goods.
Key Provisions
The Customs Act 1901, specifically under Part XVA, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (section 269F). These orders provide for a lower rate of customs duty on specific goods. An application for a TCO can be submitted by any person, provided that the goods in question are not those listed in section 269SJ, which are ineligible for TCOs. For a TCO to be granted, the CEO must be satisfied that the application meets the core criteria, which include a determination that no substitutable goods are produced in Australia at the time the application is lodged (section 269C).
The obligations imposed by the Act on the CEO include evaluating the eligibility of the goods for a TCO and making a written order if the application is deemed to meet the core criteria (section 269P(3)). The CEO must also publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made, although no such submissions were received in this case (subsection 269K(1)). The TCO becomes effective on the day the application is lodged (subsection 269S(1)), meaning that the concessions apply retroactively from that date.
Failing to adhere to the requirements set out in the Customs Act 1901 and its associated regulations can result in various consequences. While the explanatory statement does not specify particular offences or penalties, breaches of the Act can generally lead to legal action, including civil or criminal penalties. For instance, knowingly making false statements in an application for a TCO could potentially be considered an offence under the Crimes Act 1914, with associated penalties including fines and imprisonment. Additionally, any misuse of a TCO, such as attempting to claim tariff concessions on ineligible goods, could lead to further legal consequences, including the imposition of back duties, fines, or other sanctions.