EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1003602
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 double universal joint and shaft assemblies on 19 January 2010.
Instrument
TCO No 1003602 was made on 07 April 2010. It declares that those certain double universal joint and shaft assemblies 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. 1003602 is taken to have come into force on 19 January 2010.
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, introduced a scheme for Tariff Concession Orders (TCOs) that allows for the application of reduced customs duty rates to certain goods. Enacted by the Australian Parliament, the Act facilitates the economic benefits of lower tariffs for imported goods, provided that the application meets specified criteria. One such criterion is that the goods in question should not have substitutable equivalents produced domestically. This policy aims to support industries by providing tariff relief that aligns with the competitive landscape of the domestic market. In the case of Tariff Concession Instrument No. 1003602, the Chief Executive Officer of Customs determined that certain double universal joint and shaft assemblies qualified for tariff concessions, given that no substitutable goods were produced in Australia at the time of the application. Consequently, the tariff rate on these specific goods was reduced to free, effective from the date the application was lodged.
Scope and Application
The Customs Act 1901 applies to the administration of customs and excise duties, including the regulation of imported goods through Tariff Concession Orders (TCOs). Specifically, the Act governs the process under which a TCO can be applied for and granted, allowing for reduced customs duty rates on certain goods. The Act applies to entities and individuals who seek tariff concessions for goods imported into Australia, provided the goods are not specified as excluded under section 269SJ of the Act and meet the core criteria outlined in section 269C. The application of a TCO is determined by the Chief Executive Officer of Customs, who must ensure that the goods in question are not substitutable by goods produced in Australia. The scope of this legislation is national, as it pertains to the importation of goods across Australia and is administered at the federal level. The Act does not disadvantage any person other than the Commonwealth and does not impose liabilities on any person in relation to the TCO. Any TCOs made under the Act can be further detailed or restricted through subordinate instruments.
Key Provisions
The key provisions of this legislation focus on the creation and operation of Tariff Concession Orders (TCO) under the Customs Act 1901. Section 269F (1) of the Act allows for an application to the Chief Executive Officer (CEO) of Customs for a TCO in respect of specified goods. Once the application is deemed valid and does not involve goods excluded under section 269SJ, the CEO evaluates whether the application meets the core criteria outlined in section 269C. This involves confirming that no substitutable goods are produced in Australia on the day the application was lodged, as defined in section 269D and section 269E of the Act.
The obligations imposed on the parties by this Act are primarily centred around the application and evaluation process for TCOs. Section 269K (1) requires the CEO to publish a notice in the Gazette after accepting an application as valid, inviting submissions from interested parties. The CEO must then consider these submissions, if any, before deciding on the TCO. The CEO must ensure that any TCO made is in compliance with the Act and that the rights of the parties are not unjustifiably affected, as outlined in subsection 269S (1). Furthermore, the Act stipulates that a TCO will not affect any pre-existing rights or impose liabilities on any person for actions taken prior to the TCO's registration.
In terms of consequences for non-compliance, the Act does not explicitly state specific offences or penalties for breaches related to the TCO process itself. However, any subsequent misuse or fraudulent activities associated with the TCO could attract penalties under other sections of the Customs Act or related legislation. The Act ensures that the rights of importers are protected and that any duties paid on goods after the effective date of the TCO may be subject to a refund under paragraph 126(1)(r) of the Regulations. This safeguard ensures that the implementation of a TCO does not result in any financial disadvantage to importers.