EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0927348
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 vinyl surface mats on 29 July 2009.
Instrument
TCO No 0927348 was made on 09 October 2009. It declares that those certain vinyl surface mats 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. 0927348 is taken to have come into force on 29 July 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, includes provisions for Tariff Concession Orders (TCOs) which can reduce customs duties on specified goods. The primary objective of this legislation is to facilitate trade by lowering the customs duty on goods that are not produced in Australia, thereby encouraging imports and supporting economic efficiency. The explanatory statement for Tariff Concession Instrument No. 0927348, issued under this Act, details a specific case where Bluescope Steel applied for and was granted a tariff concession on certain vinyl surface mats, reducing the duty rate from 5% to free. This instrument was introduced to address the problem of ensuring that Australian consumers and businesses have access to competitively priced goods not produced domestically, thus aligning with the policy objective of promoting a fair and efficient trade environment.
Scope and Application
The Customs Act 1901, as amended, encompasses the scheme for Tariff Concession Orders (TCOs) under which the Chief Executive Officer of Customs (CEO) can lower customs duty rates on specified goods. This legislation applies to any person or entity that seeks to reduce the customs duty on certain goods by applying for a TCO, provided that the goods in question are not specified in section 269SJ of the Act as ineligible for such concessions. The application process involves satisfying the core criteria outlined in section 269C of the Act, which primarily necessitates that no substitutable goods are produced in Australia at the time of application. The geographic scope of the Act is national, affecting all imports into Australia. The application of TCOs does not impose any disadvantages or liabilities on persons other than the Commonwealth, and the rights of importers are protected and may be beneficially affected by such concessions. The TCOs are subject to subordinate instruments which provide further details on the application process and the conditions under which they may be made.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0927348 under the Customs Act 1901 (sections 269C, 269P, and 269S) establish the conditions under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (CEO). Specifically, section 269C mandates that a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (subsection 269C). If the CEO is satisfied that the application meets these core criteria, section 269P(3) requires the CEO to issue a written order (TCO) specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question. This instrument, TCO No. 0927348, declares that certain vinyl surface mats are subject to a tariff rate of free duty instead of the general rate of 5%, effective from the day the application was lodged, which was 29 July 2009.
The Customs Act 1901 imposes certain obligations on parties and entities governed by this Act. Firstly, the CEO of Customs is mandated to assess TCO applications against the core criteria set out in section 269C. If the application meets these criteria, the CEO must proceed to issue a TCO as per section 269P(3). Additionally, section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any interested parties if they believe the TCO should not be made. In this case, no submissions were received, leading to the issuance of TCO No. 0927348. Importers of the affected goods also have the right to apply for a refund of duty under paragraph 126(1)(r) of the Regulations, which is beneficially affected by this TCO.
Under the Customs Act 1901, there are specific offences, penalties, and consequences for non-compliance with the Act. While the explanatory statement does not detail specific penalties for breaches related to TCOs, it is important to note that breaches of the Customs Act 1901 generally attract civil and/or criminal penalties. Civil penalties can include fines and other monetary penalties, while criminal offences can result in imprisonment, depending on the severity and nature of the breach. The maximum penalties are not specified in the explanatory statement, but they can vary widely based on the specific provisions of the Customs Act 1901 and the associated regulations. Non-compliance with TCOs or other provisions of the Act could potentially lead to these penalties, emphasizing the importance of adhering to the legislative requirements.