EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1043598
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 dc motors on 23 September 2010.
Instrument
TCO No 1043598 was made on 20 December 2010. It declares that those certain dc motors 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. 1043598 is taken to have come into force on 23 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 Parliament of Australia, provides a framework for the imposition of customs duties on imported goods. One of the key features of this Act is the ability for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs), which can reduce the rate of customs duty on certain goods. This scheme was introduced to address the need for flexibility in the application of customs duties to ensure that Australian businesses can access the goods they need for production and other purposes without undue financial burden. The Tariff Concession Instrument No. 1043598, issued in 2010, is an example of this mechanism in action, providing tariff concessions for specific dc motors and ensuring that importers of these goods are not disadvantaged by any retrospective changes in duty rates. The policy objective underlying these concessions is to support Australian industry by making imported goods more competitively priced, thereby aiding local businesses in their operations and potentially leading to broader economic benefits.
Scope and Application
The Tariff Concession Instrument No. 1043598 under the Customs Act 1901 applies to entities seeking a tariff concession order (TCO) for certain dc motors, with Bluescope Steel being the specific applicant in this instance. The application process is initiated when an entity lodges an application with the Chief Executive Officer of Customs (CEO), who must then determine if the application meets the core criteria specified in the Act, such as the absence of substitutable goods produced in Australia. The Act's jurisdictional reach is nationwide, as it operates under the Commonwealth's legislative authority. Once a TCO is made, it comes into force on the day the application was lodged, which in this case was 23 September 2010. Notably, the TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on individuals or entities, although it does entitle importers to apply for a refund of duty on goods imported since the effective date of the TCO. The Act may also extend or restrict application through subordinate instruments, though specific details of such instruments are not elaborated in this particular explanatory statement.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 1043598 involve the granting of tariff concessions on certain dc motors under the Customs Act 1901 (section 269F). An application can be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) if the goods are not specified in section 269SJ, which lists goods ineligible for TCOs. If the CEO determines that the application meets the core criteria outlined in section 269C, they must issue a written TCO (section 269P(3)). In this case, the CEO concluded that the dc motors qualified for a tariff concession since no substitutable goods were produced in Australia, as defined in sections 269D and 269E.
The Act imposes several obligations on the parties involved. The CEO must assess applications against the core criteria and, if satisfied, issue a TCO (section 269C). The CEO is also required to publish a notice in the Gazette inviting submissions from any interested parties who may object to the TCO (subsection 269K(1)). In this instance, no submissions were received. Additionally, section 269S(1) stipulates that a TCO comes into effect on the day the application is lodged.
Failure to comply with the requirements of the Customs Act 1901 may result in various consequences. While the explanatory statement does not detail specific offences or penalties for breaches of the TCO itself, the broader Customs Act encompasses provisions for civil and criminal penalties for non-compliance. For instance, section 195 of the Act allows for fines and imprisonment for offences related to the importation of goods without the necessary authorisation. However, in this particular context, the focus is on the procedural correctness of the TCO application and issuance.
The Customs Act 1901 and its associated regulations provide mechanisms for addressing any breaches. For instance, section 228 of the Act allows for the imposition of fines and penalties for contraventions of the Act. The specific penalties depend on the nature and severity of the breach, with potential maximum fines and imprisonment terms outlined in the Act. For the purposes of this TCO, however, the emphasis is on ensuring that the concession is correctly applied and that any affected parties, particularly importers, are able to benefit from the tariff reduction.