EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0938775
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 electric welder parts on 14 October 2009.
Instrument
TCO No 0938775 was made on 30 December 2009. It declares that those certain electric welder parts 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. 0938775 is taken to have come into force on 14 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 Australian Parliament, provides a framework for the regulation of customs and excise duties. Specifically, Part XVA of the Act facilitates the establishment of Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs may reduce customs duty on certain goods. This legislative instrument was introduced to address the need for a streamlined process to grant tariff concessions on goods that do not have local substitutes, thereby encouraging imports and potentially lowering consumer prices. The policy objective is to ensure that the application of such concessions is fair and considers the interests of all stakeholders, including the potential for duty refunds for importers. Tariff Concession Instrument No. 0938775, made under this Act, pertains to an application by Bluescope Steel Limited for certain electric welder parts, which was approved on the basis that no substitutable goods were produced in Australia, resulting in a reduction of duty from 5% to free. This instrument came into force on the date the application was lodged, 14 October 2009, and does not impose any liabilities on non-Commonwealth entities.
Scope and Application
The Tariff Concession Instrument No. 0938775 under the Customs Act 1901 applies to the entity Bluescope Steel Limited, which sought a Tariff Concession Order (TCO) for certain electric welder parts. The application and subsequent TCO pertain specifically to the importation of these parts, ensuring that no substitutable goods are produced in Australia, thereby qualifying for the concession. The instrument operates under the jurisdiction of the Commonwealth and extends to the application of the Customs Tariff Act 1995. Notably, the TCO does not disadvantage any person other than the Commonwealth and does not impose any new liabilities. Instead, it benefits importers by potentially allowing them to apply for a refund of duty on goods imported since the TCO came into effect on 14 October 2009. The legislation does not specify any exclusions or exemptions beyond those stipulated in section 269SJ of the Act, which precludes certain goods from being subject to a TCO.
Key Provisions
The key operative sections of the Customs Act 1901, as detailed in the explanatory statement, pertain primarily to the process and criteria for making Tariff Concession Orders (TCOs) under section 269F (1). If a person applies for a TCO in respect of goods, the Chief Executive Officer of Customs (CEO) must decide whether the application meets the core criteria set out in section 269C of the Act. A TCO application meets these criteria if, on the day it was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269C). If the CEO is satisfied that the application meets these criteria, they must make a written order declaring that the goods are subject to a prescribed rate of duty (subsection 269P(3)).
Under this legislation, the CEO has specific obligations when considering an application for a TCO. The CEO must ensure that the application is not in respect of goods specified in section 269SJ, which lists those goods that cannot be subject to a TCO. Additionally, the CEO must verify that no substitutable goods were produced in Australia on the day the application was lodged. Once the CEO is satisfied that the application meets the core criteria, they are required to publish a notice in the Gazette inviting submissions from any person who may have reasons why the TCO should not be made (subsection 269K(1)). In this particular case, no submissions were received in response to the notice published by the CEO.
The Act also outlines the potential consequences for non-compliance. However, in this instance, the explanatory statement does not detail any specific offences or penalties related to the breach of the TCO provisions. Generally, breaches of the Customs Act 1901 can lead to civil or criminal penalties, including fines and imprisonment, depending on the nature and severity of the breach. The explanatory statement specifies that the TCO does not affect the rights of any person or impose any liabilities on any person in respect of anything done or omitted to be done before the date of registration. Therefore, the main focus is on ensuring compliance with the criteria for making a TCO and the process for publishing notices and considering submissions.