EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0931082
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 Limited applied for a TCO in respect of certain reduction gearboxes on 24 August 2009.
Instrument
TCO No 0931082 was made on 13 November 2009. It declares that those certain reduction gearboxes 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. 0931082 is taken to have come into force on 24 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. 0931082, enacted under the Customs Act 1901, was introduced to address the specific needs of industries seeking tariff concessions for imported goods. This legislation allows the Chief Executive Officer of Customs to grant tariff concessions, reducing or eliminating customs duty for certain goods, provided they meet the criteria outlined in the Act. The primary objective of this legislation is to support Australian industries by enabling them to import goods at a lower cost, thereby facilitating competitiveness and potentially reducing the overall cost of goods for consumers. The instrument was made to benefit Bluescope Steel Limited by exempting certain reduction gearboxes from the general rate of duty, thereby promoting efficiency and economic viability within the industry. The instrument came into effect on the date the application was lodged, 24 August 2009, and no submissions opposing the concession were received.
Scope and Application
The Customs Act 1901, specifically Part XVA, authorises the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) that lower the customs duty on certain imported goods. This process applies to any person who can demonstrate that no substitutable goods are produced in Australia in the ordinary course of business at the time the application is made. The application must not be in respect of goods specified in section 269SJ of the Act, which excludes certain categories of goods from eligibility for a TCO. Once an application meets the core criteria set out in section 269C of the Act, the CEO must make a TCO, which specifies a lower rate of customs duty, often free, as applicable to the goods in question. The TCO applies on the day the application was lodged, as per subsection 269S(1) of the Act, and the CEO is required to publish a notice in the Gazette inviting submissions from interested parties, although no submissions were received in response to the notice for TCO No. 0931082. This instrument directly benefits importers who can apply for a refund of duty on goods imported since the TCO's effective date, without imposing any new liabilities on them.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0931082 pertain to the creation and effect of Tariff Concession Orders (TCOs) under the Customs Act 1901. Specifically, section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of certain goods. If the CEO determines that the application meets the core criteria, they must make a written order (section 269P(3)). The CEO must also ensure that the application is not in respect of goods that are specified in section 269SJ as ineligible for a TCO. In this case, the CEO concluded that the application met the core criteria because no substitutable goods were produced in Australia on the day the application was lodged, in accordance with section 269C.
The obligations and requirements imposed by the Customs Act 1901 on the parties involved include the submission of a valid TCO application by an interested party, such as Bluescope Steel Limited. Once the CEO accepts the application, they must publish a notice in the Gazette inviting any person to lodge submissions if they believe the TCO should not be made (subsection 269K(1)). In this instance, no submissions were received, leading to the issuance of TCO No. 0931082. The TCO came into effect on the day the application was lodged, 24 August 2009, as per subsection 269S(1). Furthermore, the TCO does not affect the rights of any person, except the Commonwealth, as at the date of registration, ensuring that no one is disadvantaged or imposed liabilities for actions taken prior to the TCO’s registration.
In terms of offences, penalties, or consequences for breaches, the Customs Act 1901 does not specify particular penalties for failing to comply with a TCO or for any breaches related to the application process. However, general provisions under the Customs Act may apply for non-compliance with customs regulations, which could include fines and imprisonment. The TCO itself does not impose any liabilities on any person, ensuring that the rights of importers are beneficially affected, and they can apply for a refund of duty on goods imported since the TCO came into force, as outlined in paragraph 126(1)(r) of the Regulations. This structure ensures that the TCO’s implementation is fair and does not impose undue burdens on any party involved.