EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0922340
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 Pty Ltd applied for a TCO in respect of certain grinding wheels on 30 June 2009.
Instrument
TCO No 0922340 was made on 18 September 2009. It declares that those certain grinding wheels 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. 0922340 is taken to have come into force on 30 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 Parliament of Australia, establishes a framework for the administration of customs and excise, including the process for making Tariff Concession Orders (TCOs). These orders are designed to provide tariff concessions on certain imported goods by reducing or eliminating the customs duty applicable to them, which can help stimulate trade and economic activity by making imported goods more competitively priced. The problem or gap that this legislation addresses is the need for a streamlined process to grant tariff concessions on specific goods, ensuring that businesses and consumers benefit from reduced costs. The explanatory statement indicates that the Tariff Concession Instrument No. 0922340 was introduced to facilitate tariff concessions for certain grinding wheels, as applied by Bluescope Steel Pty Ltd, by reducing the duty rate from 5% to free, effective from the date of the application. The policy objective here is to support Australian industries by making certain imported goods more affordable, thereby encouraging their use and integration into local supply chains.
Scope and Application
The Tariff Concession Instrument No. 0922340, made under the Customs Act 1901, applies to Bluescope Steel Pty Ltd’s application for a Tariff Concession Order (TCO) concerning specific grinding wheels. This Act governs the conditions under which the Chief Executive Officer of Customs can grant tariff concessions, thereby allowing for a lower rate of customs duty on eligible goods. The TCO in question was issued on 18 September 2009, effective from 30 June 2009, the date the application was lodged. The legislation applies to any entity or individual who imports the specified grinding wheels, with the primary benefit accruing to importers who can claim refunds for duty paid on such goods imported since the TCO’s effective date. Notably, the TCO does not impose any liabilities on any person and protects the rights of those affected as at the date of registration, ensuring no disadvantage or liability arises from actions taken prior to the TCO’s effective date.
Key Provisions
The Tariff Concession Instrument No. 0922340 under the Customs Act 1901 outlines the provisions for making a Tariff Concession Order (TCO) (section 269C). Specifically, this instrument declares that certain grinding wheels are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, thereby granting them a concession on customs duty. This means that the general duty rate of 5% is reduced to free for these particular goods. The operative section, 269P(3), requires the Chief Executive Officer of Customs (CEO) to make a written order (TCO) if satisfied that the application meets the core criteria, particularly that no substitutable goods were produced in Australia on the date the application was lodged (section 269B, 269D, 269E).
The Act imposes several obligations on parties involved in the application process for a TCO. Under section 269F, a person can apply to the CEO for a TCO in respect of goods, provided the goods are not specified in section 269SJ, which lists those goods that cannot be subject to a TCO. Additionally, the CEO must ensure that the application meets the core criteria outlined in section 269C. The CEO also has a duty to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid (subsection 269K(1)), inviting submissions from any person who believes there are reasons why the TCO should not be made. In this case, the CEO did not receive any submissions (subsection 269K(1)).
The Act also details the consequences for breach of its provisions. While specific offences and penalties are not extensively outlined in the explanatory statement, it is implied that non-compliance with the core criteria for a TCO application, or any other requirement of the Customs Act 1901, could lead to legal ramifications. The maximum penalties for breaches of customs laws generally include fines and imprisonment, depending on the severity and intent of the breach. For instance, under section 245 of the Customs Act 1901, severe penalties can be imposed for fraudulent or willful breaches, including fines of up to $22,000 or imprisonment for up to two years, or both. These provisions ensure that the integrity of the customs duty system is maintained and that only eligible goods receive tariff concessions.