EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1006015
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 gearboxes on 03 February 2010.
Instrument
TCO No 1006015 was made on 23 April 2010. It declares that those certain gearboxes 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. 1006015 is taken to have come into force on 03 February 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 Tariff Concession Instrument No. 1006015, enacted in 2010, addresses a specific need within the Customs Act 1901 by providing for tariff concessions on certain imported goods. This instrument allows the Chief Executive Officer of Customs to apply a lower rate of customs duty on goods that meet particular criteria, thereby facilitating trade and reducing costs for importers of certain specified items. The instrument was introduced to support economic efficiency and competitiveness by ensuring that Australian importers are not unduly burdened by customs duties on goods for which no locally produced alternatives exist. The process for enacting this instrument involves an application to the CEO, who must determine whether the application meets the core criteria as outlined in the Act, specifically under sections 269C and 269SJ. If satisfied, the CEO issues a Tariff Concession Order, which is published in the Gazette with an invitation for public submissions, though in this instance, no submissions were received. This legislative measure is designed to benefit importers by potentially allowing them to claim refunds on duties paid on goods imported since the effective date of the concession.
Scope and Application
The Tariff Concession Order No. 1006015, made under the Customs Act 1901, applies to specific gearboxes that were subject to an application by Bluescope Steel Limited. This instrument is designed to provide a lower rate of customs duty for these goods, effectively making it free, as long as the conditions set out in the Act are met. The Act applies to any person or entity seeking tariff concessions for goods imported into Australia, provided these goods do not fall under the categories specified in section 269SJ of the Act. The geographic and jurisdictional reach of this legislation is nationwide, as it pertains to customs duties across Australia. The application of the Act is not restricted by state or territory boundaries, thereby maintaining a uniform approach to tariff concessions nationally. There are no stated exclusions or exemptions within this specific TCO, and it is directly tied to the conditions outlined in the Customs Act 1901. The application of the Act can be extended or restricted through subordinate instruments, which may provide further detail or clarification on specific aspects of the tariff concession scheme.
Key Provisions
The main operative sections of the Customs Act 1901 as applied in Tariff Concession Instrument No. 1006015, include sections 269C, 269F, and 269P. 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, provided the goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. Section 269C stipulates that an application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets these core criteria, they must make a written order (TCO) declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff). This specific instrument, TCO No. 1006015, was made on 23 April 2010, declaring that certain gearboxes are goods to which item 50 of Schedule 4 to the Tariff applies, because no substitutable goods were produced in Australia.
The Act imposes certain obligations and requirements on the parties involved. The CEO is mandated to decide whether an application meets the core criteria as per section 269C. If the CEO is satisfied that the application meets the criteria, they must make a written order, as stipulated in section 269P(3). Furthermore, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as a valid application, inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission. This is detailed in subsection 269K(1) of the Act. In this specific case, the CEO did not receive any submissions in response to the invitation.
Breach of the provisions of the Customs Act 1901 and the associated Tariff Concession Instrument No. 1006015 can lead to offences, penalties, or civil/criminal consequences. The Act does not explicitly state penalties for failure to comply with the TCO provisions, but general penalties for contravening the Customs Act may apply. These penalties can include fines and imprisonment, depending on the nature and severity of the breach. For example, under section 235 of the Customs Act, the maximum penalty for offences involving fraudulent conduct can be imprisonment for up to 10 years, or a fine of up to 10,000 penalty units, or both. The rights of importers will be beneficially affected by the TCO, and they can apply for a refund of duty on goods imported since the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.