EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0936684
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 outdoor current transformers on 25 September 2009.
Instrument
TCO No 0936684 was made on 11 December 2009. It declares that those certain outdoor current transformers 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. 0936684 is taken to have come into force on 25 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 Australian Parliament, provides a framework for the administration of customs duties and the regulation of imports and exports. This Act was introduced to address the need for a structured approach to managing customs duties and facilitating international trade. One significant aspect of the Act is the provision for Tariff Concession Orders (TCOs), which allow for reduced customs duty rates on certain goods. These concessions are intended to support specific industries by lowering the cost of imported goods, thereby making them more competitive with locally produced alternatives. The explanatory statement for Tariff Concession Instrument No. 0936684, which was made in 2010, outlines the process for applying for and granting these concessions, ensuring that the application meets specified criteria and is subject to public consultation before implementation. The instrument in question, TCO No. 0936684, was made to benefit Bluescope Steel by granting them a tariff concession on certain outdoor current transformers, reducing the duty rate from 5% to free, effective from the date the application was lodged.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines a framework for the issuance of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs. This legislation applies to any person or entity seeking to reduce customs duty on specific goods through the application process, provided the goods are not specified in section 269SJ as ineligible for such concessions. The application must meet core criteria as outlined in sections 269C, 269D, and 269E of the Act, primarily ensuring that no substitutable goods are produced in Australia in the ordinary course of business at the time of application. This Act's jurisdiction extends nationally, affecting all entities importing goods into Australia. Notably, a TCO does not affect existing rights or impose liabilities for actions taken before its registration, but it does provide beneficial rights to importers who can apply for duty refunds under the Regulations. The Act's application can also be extended or modified through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the rates of duty applicable to goods under various tariff items.
Key Provisions
The Tariff Concession Instrument No. 0936684 under the Customs Act 1901 provides the legal framework for the issuance of a Tariff Concession Order (TCO). This instrument, as detailed in section 269F, enables the Chief Executive Officer of Customs (CEO) to consider applications for lower rates of customs duty on certain goods. The application process begins when a person submits a request to the CEO, who then assesses whether the goods in question meet the core criteria stipulated in section 269C. This core criterion requires that, at the time of application, there are no substitutable goods produced in Australia in the ordinary course of business, as defined by sections 269D and 269E.
The obligations imposed by the Customs Act on the parties involved are primarily centred around the application and assessment of TCOs. The CEO must ensure that any TCO application is considered against the criteria set forth in the Act, including the requirement that no substitutable goods are produced in Australia. Additionally, the CEO is mandated to publish a notice in the Gazette under subsection 269K(1) as soon as practicable after accepting a valid TCO application, inviting any interested parties to submit objections or submissions. This procedural step ensures transparency and allows for public input before a TCO is issued.
Failure to comply with the requirements of the Customs Act, particularly in relation to the application and issuance of TCOs, can lead to various civil and criminal consequences. While the explanatory statement does not detail specific offences under the Act, breaches of customs regulations generally can result in penalties. For instance, under section 231 of the Customs Act, a person can face fines of up to $22,200 and imprisonment for up to two years for customs offences. These penalties underscore the importance of adhering to the Act's provisions in the application and issuance of TCOs.
In summary, the Tariff Concession Instrument No. 0936684, along with the relevant sections of the Customs Act, provides a structured process for the CEO to assess and issue TCOs that reduce customs duties on specific goods. It imposes clear obligations on the CEO and other parties to follow the statutory criteria and procedural steps. The Act also sets out significant penalties for non-compliance, ensuring that the process is conducted with due diligence and legal integrity.