EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0929303
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 stop or ball valves on 11 August 2009.
Instrument
TCO No 0929303 was made on 23 October 2009. It declares that those certain stop or ball valves 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. 0929303 is taken to have come into force on 11 August 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. 0929303, enacted in 2009 under the Customs Act 1901, was introduced to address the need for tariff concessions on specific imported goods. This instrument was made by the Chief Executive Officer of Customs, who has the authority to grant tariff concession orders for goods that do not have substitutable Australian-produced alternatives. The application by Bluescope Steel Pty Ltd for a tariff concession order on certain stop or ball valves was approved because no such goods were produced in Australia, leading to a tariff rate reduction from 5% to free for these items. The instrument aims to benefit importers by potentially allowing them to claim refunds on duties paid on these goods since the effective date of the concession, 11 August 2009, without imposing any additional liabilities on non-Commonwealth entities.
Scope and Application
The Customs Act 1901, specifically as applied through Tariff Concession Order (TCO) No. 0929303, applies to certain stop or ball valves that are imported into Australia. This legislation is designed to provide tariff concessions on these goods by reducing their customs duty rate to free, as opposed to the general rate of 5%. The Act allows the Chief Executive Officer of Customs to grant tariff concessions if no substitutable goods are produced in Australia in the ordinary course of business, which was the case for the goods in question as determined by the CEO. The application of this Act is not limited by geographic or jurisdictional constraints, applying nationally across Australia. There are specific exclusions outlined in section 269SJ of the Customs Act 1901, which lists goods that cannot be subject to a TCO. The Act can be further extended or modified through subordinate instruments, ensuring its applicability can adapt to changing circumstances or requirements. The commencement of this specific TCO is dated from the day the application was lodged, 11 August 2009, and it does not disadvantage any person or impose liabilities for actions taken prior to its registration.
Key Provisions
The main operative sections of the Tariff Concession Order (TCO) No. 0929303 under the Customs Act 1901 include section 269C, which specifies the core criteria that a TCO application must meet, and section 269P(3), which requires the Chief Executive Officer (CEO) of Customs to make a written order if the application meets these criteria (sections 269C and 269P(3)). Section 269K(1) mandates that the CEO must publish a notice in the Gazette inviting submissions regarding the application as soon as practicable after accepting it as valid (section 269K(1)). Additionally, subsection 269S(1) specifies that the TCO comes into force on the day the application was lodged (section 269S(1)).
The Act imposes several obligations on the parties involved. Firstly, an applicant, such as Bluescope Steel Pty Ltd, must apply to the CEO for a TCO and ensure that the application meets the core criteria as outlined in section 269C (section 269C). The CEO is required to assess whether the application meets these criteria and, if satisfied, must make a written order in accordance with section 269P(3) (section 269P(3)). Furthermore, the CEO must publish a notice in the Gazette, inviting any interested parties to lodge submissions regarding the application as soon as practicable after accepting it as valid (section 269K(1)).
In terms of potential breaches and consequences, the Act does not explicitly detail offences or penalties for non-compliance with the TCO process. However, failure to adhere to the statutory requirements for applying for and granting a TCO could lead to legal challenges or disputes over the validity of the concession. Moreover, any misuse or improper application for a TCO might result in the CEO refusing to grant the concession, potentially leading to higher customs duties for the applicant’s goods.
Lastly, the TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration in a way that would disadvantage them or impose liabilities for actions taken before the registration date (subsection 269S(1)). Importers, however, are afforded the benefit of applying for a refund of duty on goods imported since the day the TCO is taken to have come into force, as stipulated under paragraph 126(1)(r) of the Regulations.