EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0918478
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 chain type magnetic separator parts on 01 June 2009.
Instrument
TCO No 0918478 was made on 21 August 2009. It declares that those certain chain type magnetic separator 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. 0918478 is taken to have come into force on 01 June 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 a framework for the regulation of imports and exports through the imposition of customs duties, and includes mechanisms for tariff concessions. The Tariff Concession Instrument No. 0918478, issued under the Customs Act, was introduced to address the specific needs of importers who require lower rates of customs duty for certain goods. This instrument allows for the application of a zero-rate duty on specified goods, provided that no substitutable goods are produced in Australia, thereby facilitating trade and economic efficiency by reducing the cost of importing these goods. The process involves an application to the Chief Executive Officer of Customs, who must determine if the application meets the core criteria as outlined in the Act. In this particular case, Bluescope Steel successfully applied for tariff concessions on certain chain type magnetic separator parts, which now enjoy a zero-rate duty under the Customs Tariff Act 1995.
Scope and Application
The Tariff Concession Instrument No. 0918478 under the Customs Act 1901 applies to specific goods that are the subject of a Tariff Concession Order (TCO). This legislation facilitates the application for and issuance of TCOs by the Chief Executive Officer of Customs, aiming to lower the customs duty on certain goods if no substitutable goods are produced in Australia in the ordinary course of business. The TCO applies to Bluescope Steel’s application for certain chain type magnetic separator parts, which are now subject to a duty rate of free under item 50 of Schedule 4 to the Customs Tariff Act 1995. The legislation’s jurisdictional reach is national, administered through the Commonwealth. It does not affect the rights of any person as at the date of registration, thereby ensuring that no existing liabilities are imposed on individuals or entities due to the TCO. However, importers of the specified goods can apply for a refund of duty on goods imported since the effective date of the TCO, which is the date the application was lodged, 01 June 2009.
Key Provisions
The key provisions of this legislation are primarily found in the Customs Act 1901, particularly within Part XVA. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. If the application is not in relation to goods specified in section 269SJ, the CEO must assess whether it meets the core criteria set out in section 269C. This section requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Definitions for terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively. If the CEO determines that the application meets these criteria, they must issue a written TCO under section 269P(3).
The Act imposes several obligations on the parties involved. Firstly, applicants must ensure that their applications are valid and not in relation to goods specified in section 269SJ. They must also demonstrate that no substitutable goods were produced in Australia at the time of application. The CEO has the duty to assess applications against these criteria and to make a TCO if the criteria are met. Additionally, upon accepting a valid application, the CEO must publish a notice in the Gazette inviting submissions from interested parties (subsection 269K(1)). This provision ensures transparency and allows stakeholders to voice any concerns regarding the proposed TCO.
Failure to comply with the provisions of the Customs Act 1901 and the related regulations could lead to various consequences. Although the Explanatory Statement does not detail specific offences or penalties, breaches of the Act could potentially result in civil or criminal penalties as outlined in other sections of the Act. The severity of these penalties would depend on the nature and extent of the breach. For instance, knowingly providing false information in an application could be considered a criminal offence under section 271 of the Act, potentially leading to fines or imprisonment. The precise penalties would be determined by the courts based on the specific circumstances of the case.
The commencement of the TCO is governed by section 269S(1), which stipulates that a TCO is deemed to come into force on the day the application was lodged. This means that TCO No. 0918478, which was applied for on 01 June 2009, is taken to have come into effect on that date. The legislation also ensures that the TCO does not adversely affect the rights of any person, except the Commonwealth, in respect of actions taken before the date of registration. Importers of the goods subject to the TCO will benefit from the reduced duty rate and may apply for a refund of duty on goods imported since the TCO came into effect, as per paragraph 126(1)(r) of the Regulations.