EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1046180
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 actuators on 13 October 2010.
Instrument
TCO No 1046180 was made on 07 January 2011. It declares that those certain actuators 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. 1046180 is taken to have come into force on 13 October 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, established a framework for imposing customs duties on imported goods. In 2011, the Tariff Concession Instrument No. 1046180 was introduced to address a gap in the existing legislative scheme by providing a mechanism for the Chief Executive Officer of Customs to grant tariff concessions on specific goods. This concession was aimed at benefiting importers by reducing the duty rates on certain items, provided no substitutable goods were produced in Australia. The instrument was designed to ensure that the tariff concessions did not adversely affect the rights of any person other than the Commonwealth and did not impose any new liabilities, while allowing importers to apply for a refund of duty on goods imported since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 1046180, made under the Customs Act 1901, pertains to the application and establishment of Tariff Concession Orders (TCOs) for specific goods. The Act applies to individuals or entities that seek to import goods that are eligible for a concession on customs duty, provided such goods meet the criteria outlined in section 269C of the Act. This means that if no substitutable goods are produced in Australia on the day the application is lodged, the Chief Executive Officer of Customs is required to make a TCO, which allows for a lower or free rate of customs duty on the specified goods. The geographic reach of this Act is national, as it is governed by Commonwealth legislation. The Act does not specify exclusions or exemptions but does delineate goods that cannot be subject to a TCO under section 269SJ. The application of this Act can be extended or modified through subordinate instruments such as regulations, which may specify additional criteria or processes for TCO applications.
Key Provisions
The Customs Act 1901 establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO) (sections 269C, 269F, 269P). A TCO can lower the customs duty on certain goods if specific criteria are met. For instance, the CEO must be satisfied that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). The CEO has the authority to make a written order (TCO) if the application meets the core criteria, which involves confirming that no substitutable goods were produced in Australia and that the goods in question do not fall under the list specified in section 269SJ of the Act.
Entities and individuals applying for a TCO must adhere to the core criteria outlined in the Act. The CEO is obligated to publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made (subsection 269K(1)). In the case of Bluescope Steel's application for a TCO regarding certain actuators, the CEO confirmed that the application met the criteria and issued TCO No. 1046180, which came into effect on 13 October 2010. Importers of these goods can apply for a refund of duty from the date the TCO came into force (paragraph 126(1)(r) of the Regulations).
Failure to comply with the requirements of the Customs Act 1901 can result in various civil and criminal consequences. The specific penalties for breaches are not detailed in the Explanatory Statement, but under Australian law, penalties for breaches of customs legislation can include fines and imprisonment. The severity of the penalties can depend on the nature and extent of the breach, with potential maximum penalties varying according to the specific provision breached. Importers who fail to comply with the terms of a TCO could also face financial penalties or other legal repercussions.