EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1009520
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 steelworks bag filter plant parts on 23 February 2010.
Instrument
TCO No 1009520 was made on 07 May 2010. It declares that those certain steelworks bag filter plant 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. 1009520 is taken to have come into force on 23 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework under which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs. This legislative mechanism allows for reduced customs duty rates on specific goods, provided certain criteria are met. Enacted to address the need for streamlined customs processes and to facilitate trade by reducing costs for importers, the Act includes provisions for tariff concessions to be applied to goods where no substitutable goods are produced in Australia. The primary policy objective is to enhance the efficiency of customs procedures and to support economic activity by lowering the financial burden on businesses importing specific goods. In the case of Bluescope Steel's application for a TCO concerning certain steelworks bag filter plant parts, the legislation ensures that the importation of these goods is subject to a reduced duty rate, thus promoting trade and reducing costs for the importer.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCOs) mechanism, allows for the application of a lower rate of customs duty on specific goods, subject to certain criteria. This process is initiated when a person applies to the Chief Executive Officer of Customs for a TCO in respect of goods, provided those goods are not specified in section 269SJ of the Act as ineligible. The CEO evaluates the application against the core criteria, notably whether no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, as per section 269C. If the application meets these criteria, the CEO must issue a written order, which is effective from the date the application was made. In this instance, Bluescope Steel applied for and was granted a TCO for certain steelworks bag filter plant parts, resulting in a tariff concession from a general duty rate of 5% to duty-free status. The application of this TCO does not affect the rights of any person as at the date of registration and does not impose any liabilities on any person. Instead, it potentially benefits importers by allowing them to apply for a refund of duty on goods imported since the TCO came into force. The Act thus applies to any person or entity applying for a tariff concession on goods and extends across the Commonwealth of Australia, with specific exemptions and criteria as outlined.
Key Provisions
The Customs Act 1901, specifically Part XVA, outlines the framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO) (s 269F). A TCO application may be made by a person, and if the CEO determines that the application pertains to goods not specified in section 269SJ, which lists those goods that cannot be subject to a TCO, the CEO must assess whether the application meets the core criteria (s 269C). The core criteria are met if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (s 269P(3)). If these conditions are satisfied, the CEO must issue a written order declaring that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995, effectively applying a lower rate of customs duty to them.
Entities subject to the Customs Act, such as importers and exporters, must be aware of the core criteria and the implications of applying for a TCO. Importers, in particular, have the opportunity to apply for a refund of duty on goods imported since the TCO is deemed to have come into force (Reg 126(1)(r)). The obligations imposed on these entities include ensuring that any TCO application complies with the criteria set out in the Act, and that all necessary documentation is provided to the CEO. The CEO, on their part, must promptly publish a notice in the Gazette inviting submissions from interested parties if a TCO application is accepted as valid (s 269K(1)). They must also decide on the application based on the core criteria and, if met, issue the TCO accordingly.
Failure to comply with the requirements of the Customs Act or the imposition of penalties for breaches is also addressed in the legislation. While the explanatory statement does not explicitly detail the penalties, it is reasonable to infer that breaches could lead to financial penalties or other legal consequences as per the general provisions of the Customs Act. The specific penalties for non-compliance or breaches would typically be outlined in the relevant sections of the Act and its associated regulations. Importers who do not follow the correct procedures for applying for a refund of duty, for example, may face financial penalties or other legal repercussions as determined by the Act. The precise consequences would depend on the nature and severity of the breach.