EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1108448
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 speed relays on 08 March 2011.
Instrument
TCO No 1108448 was made on 31 May 2011. It declares that those certain dc speed relays 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. 1108448 is taken to have come into force on 08 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, establishes a framework for the regulation of customs duties, including the process for applying for and making Tariff Concession Orders (TCOs). These orders can reduce the customs duty on specific goods, provided certain criteria are met. The 2011 Tariff Concession Instrument No. 1108448 was introduced to address the need for tariff concessions on certain DC speed relays, allowing Bluescope Steel to apply for and be granted a concession that resulted in a reduction of duty from 5% to free. The instrument was enacted to ensure that no substitutable goods were being produced in Australia at the time of application, thereby meeting the core criteria set out in the Customs Act. The instrument came into effect on the date of the application, 8 March 2011, and does not disadvantage any person or impose any new liabilities. The process involved publishing a notice in the Gazette to invite any submissions against the concession, none of which were received. This initiative is aimed at facilitating trade by reducing the duty burden on specific imported goods, thereby benefiting importers.
Scope and Application
The Customs Act 1901, through Part XVA, establishes the framework for Tariff Concession Orders (TCOs) that can be made by the Chief Executive Officer of Customs. These orders apply to goods for which a lower rate of customs duty is specified, and the process involves an application to the CEO who must determine if the application meets core criteria set out in the Act. Specifically, a TCO application is valid if no substitutable goods were produced in Australia on the day the application was lodged. The application process also involves ensuring that the goods in question are not specified in section 269SJ of the Act, which lists goods ineligible for TCOs. The geographic reach of the Act is national, applying across Australia, and the application of TCOs extends to any entity or individual importing goods that meet the specified criteria. There are no exclusions mentioned within the provided text, and the Act does not restrict the application of TCOs through subordinate instruments. The TCOs do not retroactively affect the rights of any party other than the Commonwealth, and they are designed to benefit importers by potentially allowing them to apply for duty refunds on goods imported from the date the TCO came into force.
Key Provisions
The primary operative sections of the Customs Act 1901, as amended by Tariff Concession Instrument No. 1108448, are sections 269C, 269P, and 269S, which lay out the framework for Tariff Concession Orders (TCOs). Under section 269C, a TCO can be granted if, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P mandates that if the Chief Executive Officer of Customs (CEO) is satisfied that the application meets these core criteria, they must issue a written order granting the concession. Section 269S details the commencement date of the TCO, which is the day the application was lodged.
The Act imposes specific obligations on the CEO and applicants for TCOs. The CEO must ensure that any application for a TCO does not pertain to goods specified in section 269SJ, which lists those that cannot be subject to a TCO. The CEO must also verify that the application meets the core criteria outlined in section 269C, specifically that no substitutable goods were produced in Australia. Upon meeting these criteria, the CEO is required to publish a notice in the Gazette inviting any interested parties to lodge submissions. If no submissions are received, the CEO can proceed to issue the TCO.
The Act does not explicitly state any offences, penalties, or civil/criminal consequences for breaches of the TCO provisions. However, any failure to comply with the terms of the TCO could potentially result in legal action or penalties under other relevant sections of the Customs Act 1901 or associated regulations. For instance, if a person were found to have misrepresented information in their application for a TCO, they could be subject to penalties under general administrative law provisions for misleading or deceptive conduct.
In summary, Tariff Concession Instrument No. 1108448, made under the Customs Act 1901, provides a mechanism for granting tariff concessions on certain goods, provided no substitutable goods are produced in Australia. The CEO has specific duties to verify and publish details of TCO applications, and the rights of importers are protected under the legislation. While specific penalties for breaches are not outlined in this instrument, general compliance with the Act and its associated regulations is expected.