EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0939784
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 computer fans on 22 October 2009.
Instrument
TCO No 0939784 was made on 08 January 2010. It declares that those certain computer fans 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. 0939784 is taken to have come into force on 22 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, as amended, includes a provision for Tariff Concession Orders (TCOs) to provide a lower rate of customs duty on certain goods. Enacted by the Parliament of Australia, this legislative framework addresses the need for tariff concessions to support specific economic and industrial needs by ensuring that certain goods, which are not produced domestically, can be imported at reduced duty rates, thus facilitating industry competitiveness and consumer access to a broader range of goods. The Tariff Concession Instrument No. 0939784, made under the authority of the Customs Act, exemplifies this process, where the Chief Executive Officer of Customs has granted a concession on computer fans, reducing the duty from 5% to free, effective from 22 October 2009. The policy objective underpinning these concessions is to foster economic efficiency and consumer choice by allowing the import of goods that are not locally produced, thereby balancing the interests of importers and the broader economy.
Scope and Application
The Customs Act 1901 provides a framework for the application of Tariff Concession Orders (TCOs) that offer lower rates of customs duty on specified goods, administered by the Chief Executive Officer of Customs (CEO). This legislation applies to any person who may apply for a TCO in respect of goods, provided the goods do not fall under the prohibited categories set out in section 269SJ of the Act. The scope of the Act includes entities and individuals involved in the importation of goods that may be eligible for tariff concessions, affecting their customs duty obligations. Geographically, the Act operates under the Commonwealth jurisdiction and extends to all territories and states within Australia. The Act does not impose any disadvantages or liabilities on persons other than the Commonwealth, and importantly, it does not affect any rights as at the date of registration of a TCO. The CEO is mandated to publish a notice in the Gazette inviting submissions on a TCO application, although no submissions were received for TCO No. 0939784, concerning certain computer fans. This TCO came into effect on the date the application was lodged, 22 October 2009, and declares that these computer fans are subject to a free rate of duty, as opposed to the general rate of 5%.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0939784 under the Customs Act 1901 include sections 269C, 269F, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. If the CEO is satisfied that the application meets the core criteria, they are required under section 269C to determine if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the core criteria are met, section 269P mandates that the CEO must make a written TCO order, specifying that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995.
The Act imposes specific obligations on the CEO regarding the process for granting TCOs. Once an application is deemed valid, the CEO must publish a notice in the Gazette under section 269K inviting any interested party to submit reasons why the TCO should not be made. Additionally, the CEO must ensure that the TCO does not disadvantage any person or impose liabilities on them in respect of actions taken before the TCO's effective date. For the specific case of Bluescope Steel Limited's application for computer fans, the CEO was satisfied that no substitutable goods were produced in Australia, leading to the issuance of TCO No. 0939784 on 8 January 2010.
Failure to comply with the provisions of the Customs Act 1901 could result in significant legal consequences. Although the explanatory statement does not detail specific offences or penalties for non-compliance, breaches of the Customs Act generally could lead to substantial fines and imprisonment. For example, under section 269P, if the CEO fails to make a TCO when required by law, they could be held liable for any resulting financial losses or legal actions taken by affected parties. Moreover, the imposition of tariffs contrary to a valid TCO could result in civil penalties, including fines up to the maximum prescribed by law, and potential criminal charges if fraudulent activities are involved.
The Tariff Concession Instrument No. 0939784 benefits importers by providing a duty-free rate for certain computer fans, effectively reducing their import costs. Importers can apply for refunds of any duties paid since the TCO was taken to have come into force, which is 22 October 2009, under paragraph 126(1)(r) of the Regulations. This provision ensures that the rights of importers are protected and that they are not disadvantaged by the application of the TCO. The TCO also explicitly states that it does not impose any liabilities on any person, safeguarding against any retroactive legal obligations.