EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0920709
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 sealing rings and seals on 18 June 2009.
Instrument
TCO No 0920709 was made on 04 September 2009. It declares that those certain sealing rings and seals 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. 0920709 is taken to have come into force on 18 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 was enacted to provide a comprehensive framework for the regulation of customs and excise in Australia. One of its provisions allows the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) to reduce the customs duty on certain imported goods. The Tariff Concession Instrument No. 0920709 was introduced to address a specific gap in the duty structure by offering tariff concessions on certain sealing rings and seals. This measure was designed to ensure that Australian industries can access these goods at a reduced cost, thereby supporting their competitiveness and economic efficiency. The instrument was enacted by the Parliament of Australia with the aim of facilitating the importation of these specific goods by applying a zero rate of customs duty, as opposed to the general rate of 5%. The application of Bluescope Steel was considered, and the instrument came into force on the date the application was lodged, 18 June 2009, without any submissions opposing the concession.
Scope and Application
The Customs Act 1901, through Part XVA, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), who can apply lower rates of customs duty to specified goods. The Act enables an application for a TCO by any person, provided that the goods in question are not specified in section 269SJ of the Act, which lists goods ineligible for tariff concessions. An application is considered valid if the CEO determines that no substitutable goods are produced in Australia at the time of application, as outlined in section 269C. The CEO is mandated to make a written order if the application meets these criteria, with the goods then subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. In the case of Bluescope Steel's application for certain sealing rings and seals, the CEO issued TCO No 0920709 on 4 September 2009, applying a zero duty rate instead of the general 5% rate, effective from the date the application was lodged, 18 June 2009. The TCO does not adversely affect the rights of any person other than the Commonwealth and does not impose any liabilities, although it does allow for the refund of duty on imported goods since the effective date.
Key Provisions
The main operative sections of this legislation (Tariff Concession Instrument No. 0920709) are sections 269C, 269P(3), 269S and 269K of the Customs Act 1901 (the Act). Section 269C of the Act provides that a Tariff Concession Order (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 269P(3) provides that if the Chief Executive Officer of Customs (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. Section 269S of the Act provides that a TCO is taken to have come into force on the day on which the application for the TCO was lodged. Section 269K 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 obligations and requirements the Act imposes on the parties it governs are that the CEO must decide whether a TCO application meets the core criteria, and if satisfied that it does, make a written order (a TCO). The CEO must also publish a notice in the Gazette inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The Act also provides that the rights of importers will be beneficially affected and that the TCO does not impose any liabilities on any person.
There are no offences, penalties, or civil/criminal consequences for breach of this legislation. However, 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. 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.