EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1108055
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 motorised outdoor dead tank ac circuit breakers on 03 March 2011.
Instrument
TCO No 1108055 was made on 23 May 2011. It declares that those certain motorised outdoor dead tank ac circuit breakers 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. 1108055 is taken to have come into force on 03 March 2011.
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, addresses the need for a structured scheme for tariff concession orders (TCOs) that provide lower rates of customs duty on certain goods. This Act facilitates applications for TCOs, allowing for duty-free importation of goods not produced in Australia under ordinary business conditions. The Tariff Concession Instrument No. 1108055, introduced under the authority of the Customs Act 1901, aims to ensure that goods eligible for tariff concessions are not locally produced. This specific instrument, made on 23 May 2011, pertains to certain motorised outdoor dead tank AC circuit breakers, which now qualify for free import under the customs tariff. The instrument's policy objective is to support the importation of goods that are not domestically produced, thereby encouraging trade and potentially lowering costs for importers.
Scope and Application
The Tariff Concession Instrument No. 1108055 under the Customs Act 1901 applies to entities seeking tariff concessions on specific goods, namely certain motorised outdoor dead tank AC circuit breakers. The application of this instrument is limited to those goods for which a Tariff Concession Order (TCO) has been made by the Chief Executive Officer of Customs (CEO), following an application and subsequent assessment against the core criteria outlined in the Act. The instrument is designed to provide tariff relief on certain imported goods by setting their customs duty rate to free, provided that no substitutable goods are produced in Australia in the ordinary course of business. The application of the Act is national, given its basis in Commonwealth legislation, and its effects are felt across all states and territories of Australia. The scope of the Act is further extended or restricted through subordinate instruments such as the Regulations, which may detail specific conditions and procedures for applying for and administering tariff concessions. The Act does not disadvantage existing rights of any person other than the Commonwealth and does not impose new liabilities on persons in respect of actions taken prior to the TCO's effective date.
Key Provisions
The primary sections of the Customs Act 1901 that pertain to the Tariff Concession Orders (TCO) are sections 269C, 269F, 269S, 269P, and 269K. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO. The CEO must consider whether the application meets the core criteria set out in section 269C, which includes verifying that no substitutable goods were produced in Australia on the date the application was lodged. If these criteria are met, a TCO is made under section 269P(3), and the goods in question are exempt from the usual customs duties. Section 269K mandates that the CEO must publish a notice in the Gazette inviting submissions on the TCO application, although in this case, no submissions were received.
The Act imposes several obligations on the parties involved. The CEO of Customs must assess the application to ensure it meets the core criteria, which includes determining whether substitutable goods were produced in Australia. Additionally, the CEO must publish a notice in the Gazette, inviting any interested parties to provide submissions on the application. Once the CEO is satisfied that the application meets the necessary criteria, they must make a written order declaring the goods to which the TCO applies. Importers, who are the primary beneficiaries, must also comply with the new tariff rates and can apply for a refund of any duty paid on the goods imported since the TCO came into effect.
The Act does not specify any offences or penalties for failing to comply with the TCO provisions. However, it is important to note that failure to comply with the terms of a TCO could potentially lead to administrative actions or disputes regarding the application of customs duties. For instance, if a party incorrectly claims a tariff concession, they could face a review or audit by customs authorities, which might result in additional duties or penalties being applied retroactively. While specific penalties are not outlined in the legislation, the implications of non-compliance can be significant for the involved parties.
The Tariff Concession Order No. 1108055 provides a specific example of how these sections operate in practice. Bluescope Steel applied for a TCO for certain motorised outdoor dead tank ac circuit breakers, and after the CEO confirmed that the core criteria were met, the order was issued. The TCO specifies that these goods are subject to a duty rate of free, whereas the general rate is 5%. This order came into effect on 3 March 2011, the date the application was lodged, and it does not impose any liabilities on any person other than potentially requiring importers to apply for a refund of any duty paid prior to the TCO's effective date.