EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0938853
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 filter elements on 15 October 2009.
Instrument
TCO No 0938853 was made on 04 January 2010. It declares that those certain filter elements 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. 0938853 is taken to have come into force on 15 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 Tariff Concession Instrument No. 0938853, enacted in 2010 under the Customs Act 1901, addresses the issue of ensuring that certain goods, specifically certain filter elements, are subject to a lower rate of customs duty if no substitutable goods are produced in Australia. This instrument was introduced to provide relief to businesses and consumers by reducing the cost of these goods, thereby promoting their availability and use. The instrument was made by the Chief Executive Officer of Customs (CEO) in response to an application by Bluescope Steel, following a determination that no substitutable goods were produced in Australia in the ordinary course of business. The instrument came into force on the date the application was lodged, 15 October 2009, and the CEO did not receive any submissions opposing the Tariff Concession Order (TCO). The policy objective is to ensure that the application of tariff concessions does not disadvantage any person and does not impose any liabilities on persons other than the Commonwealth.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the process through which Tariff Concession Orders (TCOs) are made by the Chief Executive Officer of Customs (CEO). These orders apply to goods for which an applicant has successfully demonstrated that no substitutable goods are produced in Australia in the ordinary course of business. Once the CEO is satisfied that the application meets the core criteria, a TCO is issued, granting a lower rate of customs duty on the specified goods. This Act applies to any person or entity that applies for a TCO and to the goods that are the subject of such an application, across the Commonwealth of Australia. The Act excludes certain goods specified in section 269SJ, which cannot be subject to a TCO. The geographic reach of this legislation is national, and it extends its application through subordinate instruments, such as the Customs Tariff Act 1995, which details the specific tariff items applicable to goods under a TCO. The TCOs themselves do not retroactively affect the rights or impose liabilities on any person other than the Commonwealth regarding actions taken before the TCO's registration date.
Key Provisions
The key operative sections of Tariff Concession Instrument No. 0938853 under the Customs Act 1901 (section 269F) require the Chief Executive Officer of Customs (CEO) to consider applications for Tariff Concession Orders (TCOs) for certain goods. If the CEO is satisfied that the application meets the core criteria (section 269C), they must make a written order declaring that the specified goods are subject to a lower rate of customs duty. In this case, section 269P(3) outlines the process for making the TCO, which includes publishing a notice in the Gazette and inviting submissions from interested parties.
The Act imposes several obligations on the parties involved. For the applicant, such as Bluescope Steel, the obligation is to submit a valid application to the CEO, ensuring it meets the criteria set out in section 269C. For the CEO, the primary obligations are to assess the application against the core criteria, make a decision based on the assessment, and publish a notice in the Gazette if the application is accepted as valid (subsection 269K(1)). The CEO must also consider any submissions received and respond appropriately. The CEO in this case did not receive any submissions opposing the TCO.
In terms of consequences for breach, the Act does not specify particular offences related to the making of a TCO. However, if a TCO is made in error, it could lead to financial implications for the government due to lost revenue from the reduced duty. Additionally, if the CEO fails to adhere to the requirements of the Act when processing an application, this could result in legal challenges from aggrieved parties. While the Act does not explicitly state penalties for breach, failure to comply with the statutory requirements could lead to judicial review or other legal consequences.
The commencement of TCO No. 0938853, as per subsection 269S(1), is effective from the date the application was lodged, which is 15 October 2009. This means that any goods imported on or after this date will be subject to the lower duty rate specified in the TCO. Importantly, the Act ensures that the rights of any person, other than the Commonwealth, are not adversely affected by the TCO. Importers of the specified goods can apply for a refund of duty paid on imports since the effective date of the TCO (paragraph 126(1)(r) of the Regulations).