EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0937230
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 hydraulic fluid pumps on 01 October 2009.
Instrument
TCO No 0937230 was made on 18 December 2009. It declares that those certain hydraulic fluid pumps 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. 0937230 is taken to have come into force on 01 October 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, provides a framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs) which can be applied for to reduce customs duty on certain goods. The Act was introduced to address the need for tariff concessions on specific goods that are not produced in Australia and are essential for particular industries or uses. Instrument No. 0937230, which was made under this Act on 18 December 2009, provides a tariff concession for certain hydraulic fluid pumps, effectively granting them a duty-free status. This was achieved after it was determined that no substitutable goods were being produced in Australia, thus satisfying the core criteria under section 269C of the Act. The concession was intended to benefit importers by allowing them to apply for refunds on duties paid on these goods imported since the effective date of the concession, which is the date the application was lodged, 1 October 2009.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, aimed at applying a lower rate of customs duty on specific goods. The application process requires a person to submit an application to the CEO, who then determines whether the application meets the core criteria as outlined in section 269C of the Act. This assessment involves verifying that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, as per sections 269B and 269D of the Act. Once the CEO is satisfied that the application meets these criteria, they must issue a written TCO. The instrument made in respect of Bluescope Steel's application for certain hydraulic fluid pumps, TCO No. 0937230, exemplifies this process, declaring the specified pumps as goods to which a particular item of the Customs Tariff Act 1995 applies, thereby setting the duty rate at free instead of the general 5%. The TCO applies nationally and comes into force on the date the application is lodged, without retroactively affecting any rights or imposing new liabilities on individuals or entities other than the Commonwealth.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0937230 include sections 269C, 269F, 269K, and 269P of the Customs Act 1901 (the Act). Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of goods. Section 269C stipulates that the CEO must decide whether the application meets the core criteria if it is not in respect of goods specified in section 269SJ of the Act. If the CEO is satisfied that the application meets the core criteria, section 269P requires the CEO to 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) applies. Section 269K mandates that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette inviting any person to lodge a submission if they believe there are reasons why the TCO should not be made.
The Act imposes specific obligations on the parties or entities it governs. The CEO of Customs must ensure that any TCO application is not in respect of goods specified in section 269SJ of the Act. The CEO must also decide whether the application meets the core criteria by verifying that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Once the CEO is satisfied that the application meets the criteria, they are required to make a written TCO. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made.
Breaches of the provisions outlined in the Act can result in various civil and criminal consequences. For example, if a person knowingly makes a false or misleading statement in an application for a TCO, they may be subject to penalties. Under section 269Z of the Act, a person who contravenes this provision is liable to a penalty not exceeding 5,000 penalty units. Furthermore, the Act stipulates that a 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. This ensures that the rights of importers will be beneficially affected, and the TCO does not impose any liabilities on any person.