EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1029255
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 Pty Ltd applied for a TCO in respect of certain crank cylinders on 30 June 2010.
Instrument
TCO No 1029255 was made on 29 September 2010. It declares that those certain crank cylinders 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. 1029255 is taken to have come into force on 30 June 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. 1029255, enacted under the Customs Act 1901, addresses the issue of applying tariff concessions to specific imported goods, in this case, certain crank cylinders. This legislation was introduced to facilitate more favourable trade terms for certain imports by reducing or eliminating customs duties, provided that no substitutable goods are produced in Australia. The instrument was made by the Chief Executive Officer of Customs following an application from Bluescope Steel Pty Ltd, which sought tariff concessions for the specified crank cylinders. The instrument came into force on the date of the application, 30 June 2010, and was published in the Gazette with an invitation for objections, none of which were received. The policy objective is to promote economic efficiency by potentially lowering the cost of imported goods, thus benefiting importers who can apply for duty refunds on eligible imports.
Scope and Application
The Tariff Concession Instrument No. 1029255, under the Customs Act 1901, applies to specific goods for which a Tariff Concession Order (TCO) is sought and granted. The instrument targets entities such as Bluescope Steel Pty Ltd, which applied for and received a concession on certain crank cylinders. The Act operates on a Commonwealth level, with the Chief Executive Officer of Customs (CEO) making the determinations regarding the concessions. The application of this Act is confined to goods that are not specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. Furthermore, the Act stipulates that a TCO will only be granted if no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269D, 269E, and 269F of the Act. This instrument extends its application through subordinate instruments such as the Customs Tariff Act 1995, which specifies the rates of duty applicable to goods under the TCO. There are no exclusions, exemptions, or thresholds explicitly mentioned in this particular explanatory statement.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1029255 under the Customs Act 1901 (the Act) revolve around the establishment and application of Tariff Concession Orders (TCOs). Section 269F of the Act allows an individual or entity to apply to the Chief Executive Officer of Customs (CEO) for a TCO regarding specific goods. Once the application is accepted and deemed valid, the CEO must assess whether the application meets the core criteria outlined in section 269C of the Act. If the CEO determines that the application satisfies these criteria, they must issue a written TCO. This written order, as per subsection 269P(3), declares that the goods specified in the application will be subject to a prescribed tariff item from Schedule 4 to the Customs Tariff Act 1995. This instrument, for example, made on 29 September 2010, declared certain crank cylinders as subject to item 50 of Schedule 4, thereby reducing the general duty rate of 5% to a rate of free duty.
The obligations imposed by the Act on the parties and entities it governs primarily concern the application and decision-making processes for TCOs. Section 269K(1) of the Act mandates that the CEO must publish a notice in the Gazette once an application is accepted as valid, inviting any interested parties to submit their views on the proposed TCO. The CEO must then consider these submissions before making a decision. Additionally, the Act ensures that the TCO does not retroactively affect the rights of any person, except the Commonwealth, and does not impose any new liabilities on any individual or entity. Instead, it aims to provide benefits to importers by potentially allowing them to apply for a refund of duty on goods imported since the effective date of the TCO, as stipulated under paragraph 126(1)(r) of the Regulations.
Failure to comply with the provisions of the Act, particularly in relation to the proper application and processing of TCOs, may result in legal consequences. While the specific offences, penalties, or civil/criminal consequences for breach are not detailed in this explanatory statement, the Act generally provides for a range of enforcement actions that may be taken against individuals or entities that do not adhere to its requirements. These could include fines, legal actions to enforce compliance, or other penalties as prescribed by law. The Act also provides mechanisms for reviewing and challenging decisions made by the CEO, ensuring that there are avenues for recourse in case of perceived injustices or errors in the TCO process.