EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0932751
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 reduction gearboxes on 03 September 2009.
Instrument
TCO No 0932751 was made on 20 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. 0932751 is taken to have come into force on 03 September 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) to provide relief from customs duty on certain goods, addressing a gap in the tariff structure where no substitutable goods are produced in Australia. This instrument, F2010L00897, was introduced to provide a tariff concession for specific goods that meet the criteria set out in the Act. The CEO of Customs is responsible for making these orders, ensuring that they comply with the core criteria established under the Act. The policy objective is to support economic activities by reducing the customs duty on goods where there are no suitable Australian-produced alternatives. This particular order, TCO No. 0932751, applies to certain reduction gearboxes, granting them a concession that reduces the duty rate from 5% to free, effective from the date the application was lodged.
Scope and Application
The Tariff Concession Instrument No. 0932751 under the Customs Act 1901 applies to the specific reduction gearboxes for which Bluescope Steel submitted an application on 3 September 2009. The instrument pertains to goods for which a Tariff Concession Order (TCO) has been granted, allowing for a reduction in the customs duty rate from the general rate to zero, as applicable to item 50 of Schedule 4 to the Customs Tariff Act 1995. The instrument's application is confined to the particular goods specified in the TCO and does not extend to any other goods, substitutable goods produced in Australia, or those specified under section 269SJ of the Customs Act 1901. The geographic scope of this legislation is national, with the application of the TCO being effective from the date the application was lodged, 3 September 2009. The instrument does not disadvantage any person by affecting their rights or imposing liabilities for actions prior to the registration date, but it does benefit importers by allowing them to apply for a refund of duties paid on the goods imported from the effective date of the TCO.
Key Provisions
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (s 269F). When a TCO is applied for, the CEO assesses whether the application meets the core criteria, primarily whether no substitutable goods were produced in Australia on the date of application (s 269C, s 269D, s 269E). If satisfied, the CEO must issue a written TCO (s 269P(3)). For instance, TCO No. 0932751, issued on 20 November 2009, applied a zero duty rate to certain reduction gearboxes as no substitutable goods were produced in Australia (s 269S(1)). The TCO took effect from 3 September 2009, the date of application (s 269S(1)).
The Act imposes certain obligations on the CEO when a TCO application is made. The CEO must publish a notice in the Gazette, inviting any person to submit reasons why the TCO should not be granted (s 269K(1)). In the case of TCO No. 0932751, no submissions were received. The TCO does not affect the rights of any person as at the date of registration, ensuring no one is disadvantaged or imposed with liabilities for actions before the registration date (s 126(1)(r) of the Regulations). Importers of the affected goods can apply for a refund of duty paid since the TCO came into force.
Breaching the conditions set by the TCO or providing false information in an application may lead to penalties. The Customs Act 1901 does not explicitly state penalties for such breaches within the provided text. However, general penalties for offences under the Customs Act can include fines and imprisonment. The maximum penalties for serious offences can be significant, reflecting the importance of compliance with the Act and its regulations. It is important for applicants and affected parties to adhere to the stipulated guidelines to avoid potential legal repercussions.