EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0920262
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 shock absorbers strip separators on 16 June 2009.
Instrument
TCO No 0920262 was made on 04 September 2009. It declares that those certain shock absorbers strip separators 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. 0920262 is taken to have come into force on 16 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 Tariff Concession Instrument No. 0920262, enacted under the Customs Act 1901, addresses the need for a streamlined process to grant tariff concessions on specific imported goods, thereby fostering fair trade practices and economic efficiency. This instrument was introduced to provide relief on customs duties for particular goods, which are otherwise subject to a general tariff rate, by allowing the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) upon meeting certain criteria. The policy objective is to ensure that Australian businesses are not unduly burdened by high import duties, particularly when locally produced alternatives are unavailable or insufficient.
The instrument was developed in response to an application by Bluescope Steel for tariff concessions on certain shock absorbers strip separators, which was approved on 4 September 2009. The TCO, which came into effect on the date of application, 16 June 2009, provides for a zero duty rate on these goods, down from the general rate of 5%, thereby benefiting importers. The process included a requirement for public consultation, though no submissions were received. The instrument ensures that it does not adversely affect existing rights or impose new liabilities on any party, except the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0920262, made under the Customs Act 1901, pertains to the application of tariff concessions for certain shock absorbers strip separators, initiated by Bluescope Steel on 16 June 2009. The Act applies to individuals or entities seeking a tariff concession order (TCO) for goods that meet specific criteria, such as the absence of substitutable goods produced in Australia. The geographic scope of the Act is national, encompassing the entire Commonwealth of Australia, as it operates under the authority of the Commonwealth's customs legislation. The application of the TCO is effective from the date the application was lodged, which in this case is 16 June 2009, and does not retroactively affect any rights or impose liabilities on any person other than the Commonwealth. The CEO of Customs was satisfied that the application met the core criteria and subsequently issued TCO No. 0920262 on 4 September 2009, which lowered the duty rate on the specified goods to free, from the general rate of 5%. The Act does not provide specific exclusions or exemptions beyond those detailed in section 269SJ, which lists goods ineligible for TCOs. Subordinate instruments may further define or extend the application of the Act, although this particular instrument focuses on the immediate application and effects of the TCO.
Key Provisions
The main operative sections of this legislation, namely Tariff Concession Instrument No. 0920262, concern the establishment and application of Tariff Concession Orders (TCOs) under the Customs Act 1901. Specifically, section 269F allows for an application to the Chief Executive Officer of Customs (CEO) for a TCO in respect of certain goods, provided they do not fall under the exclusions set out in section 269SJ. Section 269C then outlines the core criteria for a TCO, which include the absence of substitutable goods produced in Australia on the day the application was lodged (section 269D). The CEO must issue a written TCO if these criteria are met, as per section 269P(3), specifying the applicable duty rate under the Customs Tariff Act 1995.
The Act imposes several obligations and requirements on parties applying for a TCO. Firstly, an applicant must ensure that their application is not for goods excluded under section 269SJ. Secondly, the applicant must provide sufficient evidence to demonstrate that no substitutable goods were produced in Australia on the day the application was lodged, as per sections 269C and 269D. Additionally, the CEO must publish a notice in the Gazette inviting submissions from interested parties and consider any submissions received, as mandated by subsection 269K(1). The TCO will only come into effect on the day the application was lodged, as per subsection 269S(1).
Breaching the conditions of a TCO can have legal consequences. While the explanatory statement does not specify particular offences or penalties, the Customs Act 1901 and related regulations provide for various penalties for non-compliance with customs laws. Generally, penalties can include fines and imprisonment for offences such as making false statements or evading duty. In this specific context, failure to adhere to the terms of the TCO could result in the forfeiture of the tariff concession, leading to higher duties being applied retroactively. Importers could also face liability for any additional duties owed for goods imported prior to the TCO's effective date if they did not avail themselves of the concession appropriately.