EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1040125
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 switchboards on 30 August 2010.
Instrument
TCO No 1040125 was made on 17 November 2010. It declares that those certain switchboards 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. 1040125 is taken to have come into force on 30 August 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 Parliament of Australia, establishes a framework for tariff concessions through Tariff Concession Orders (TCOs). The Customs Act 1901 was introduced to address the need for a streamlined process to provide tariff concessions on specific goods, ensuring that Australian businesses have access to competitively priced goods and can remain competitive in the global market. The Tariff Concession Instrument No. 1040125 was introduced by the Chief Executive Officer of Customs (CEO) in response to an application from Bluescope Steel for a TCO concerning certain switchboards, aiming to provide tariff relief where no substitutable goods are produced in Australia. This instrument, effective from 30 August 2010, declares that the switchboards in question are subject to a free rate of duty, significantly reducing the cost for importers and benefiting the rights of those importing these goods.
Scope and Application
The Tariff Concession Instrument No. 1040125 is an instrument made under Part XVA of the Customs Act 1901, which pertains to the scheme for making Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to any person or entity seeking a concession on customs duty for specific goods, provided that these goods are not specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. The Act applies nationally across Australia, as it is a Commonwealth legislation. The scope of the Act extends to goods that are subject to the application and subsequent approval of a TCO, which can result in a reduction or exemption from the general customs duty rate. The TCO does not affect existing rights of any person other than the Commonwealth and does not impose any liabilities on any person in respect of actions taken before the TCO's effective date. The application of this Act can be further refined or extended through subordinate instruments made under the authority of the Customs Act 1901.
Key Provisions
The main operative sections of this legislation (sections 269C, 269F, 269P(3), and 269S) establish the framework for the creation of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows for an application to be made to the Chief Executive Officer (CEO) of Customs for a TCO in respect of specific goods. The CEO must then assess whether the application meets the core criteria set out in section 269C, which includes ensuring that no substitutable goods are produced in Australia at the time the application is lodged. If the CEO is satisfied that the application meets these criteria, a written order, or TCO, must be made (section 269P(3)). This order declares that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, effectively reducing or eliminating the duty on those goods.
The Act imposes several obligations on the parties involved. The CEO is required to publish a notice in the Gazette once a TCO application is accepted as valid, inviting any interested parties to submit their views on whether the TCO should be made (subsection 269K(1)). The CEO must also ensure that the application does not pertain to goods specified in section 269SJ, which are ineligible for TCOs. Additionally, the CEO must consider whether substitutable goods are being produced in Australia in the ordinary course of business, as defined by sections 269D and 269E.
Breach of the provisions outlined in this legislation can result in various consequences. While the explanatory statement does not detail specific offences or penalties, the Customs Act 1901 itself provides a framework for penalties. For example, section 257 of the Customs Act 1901 outlines various offences related to customs duties, including fraudulent attempts to evade duty. Penalties for such offences can include substantial fines, imprisonment, or both, depending on the severity of the breach. The Act also provides for civil remedies where a person suffers loss or damage due to a breach of the Act, allowing for compensation to be sought.