EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1042410
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 flare stack oscillation dampers on 15 September 2010.
Instrument
TCO No 1042410 was made on 06 December 2010. It declares that those certain flare stack oscillation dampers 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. 1042410 is taken to have come into force on 15 September 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 for managing customs duties, among other things. One specific function of this Act is the ability to issue Tariff Concession Orders (TCOs) to lower customs duty rates on certain goods, as detailed in Part XVA. This legislative mechanism was introduced to address the economic need to facilitate trade by reducing the cost of imported goods, thereby promoting competitive pricing and supporting industries reliant on imported materials. The Explanatory Statement for Tariff Concession Instrument No. 1042410, issued under the Customs Act, illustrates the application of this mechanism in practice. This particular instrument was enacted to provide tariff relief for certain flare stack oscillation dampers, acknowledging that no substitutable goods were produced in Australia at the time of the application. The policy objective is to ensure that Australian industries can access necessary materials at reduced costs, fostering economic growth and efficiency.
Scope and Application
The Customs Act 1901, as amended, allows for the application of Tariff Concession Orders (TCO) through Part XVA, which facilitates the reduction or exemption of customs duties on certain goods. This legislative framework applies to any person or entity that may apply for a TCO in respect of goods, provided the application complies with the criteria set out in the Act. The application process is overseen by the Chief Executive Officer of Customs, who must ensure that the goods in question are not specified as ineligible in section 269SJ of the Act, and that no substitutable goods are produced in Australia in the ordinary course of business as defined in sections 269D, 269E, and 269F. Once the CEO is satisfied with the application, they are mandated to issue a TCO, which was the case for Bluescope Steel's application regarding flare stack oscillation dampers, declared under item 50 of Schedule 4 to the Customs Tariff Act 1995. This legislation operates on a Commonwealth level, impacting trade practices across Australia, and includes provisions for public consultation before the issuance of a TCO to ensure transparency and fairness. The commencement of a TCO is retroactive to the date of application, thereby protecting the rights of importers who can apply for refunds of duties paid on imports since the effective date of the TCO, without imposing any new liabilities.
Key Provisions
The key operative sections of this legislation are sections 269C, 269F, and 269P(3) of the Customs Act 1901, which together establish the process for making a Tariff Concession Order (TCO). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO for certain goods. If the CEO determines that the application meets the core criteria set out in section 269C, and the goods are not specified in section 269SJ as ineligible for a TCO, then the CEO must make a written order under section 269P(3) declaring that the goods are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995. This order effectively grants the goods a lower rate of customs duty, or in some cases, free duty.
Under this Act, the CEO has specific obligations and requirements. When a valid TCO application is received, the CEO must, as soon as practicable, publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made (subsection 269K(1)). If no submissions are received, the CEO must then decide whether the application meets the core criteria. If it does, the CEO is required to make the TCO as outlined in section 269P(3). The Act also stipulates that a TCO comes into force on the day the application is lodged (subsection 269S(1)).
There are no explicit offences, penalties, or civil or criminal consequences outlined in this legislation for breaching the provisions related to TCOs. However, any failure by the CEO to comply with the requirements to publish notices and consider submissions could potentially be challenged in court, though no specific penalties are stated within this document. The focus of the Act is more on establishing the procedural requirements for making a TCO rather than on penalising non-compliance with these procedures.