EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1108472
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 welder parts on 08 March 2011.
Instrument
TCO No 1108472 was made on 30 May 2011. It declares that those certain welder parts 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. 1108472 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 managing the importation of goods into Australia, including the imposition of customs duties. The Act, specifically Part XVA, introduces a scheme where Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs, providing a lower rate of customs duty on specified goods. This mechanism was introduced to address the need for tariff flexibility and economic efficiency by allowing lower duty rates on goods where no suitable domestic alternatives exist. Instrument No. 1108472, made under this Act, was enacted to provide tariff concessions for certain welder parts, reducing their duty rate from 5% to free, effective from the date the application was lodged, 8 March 2011. The instrument ensures that the rights of importers are preserved and potentially benefit from duty refunds, while imposing no liabilities on any parties other than the Commonwealth.
Scope and Application
The Customs Act 1901, as amended through the Tariff Concession Instrument No. 1108472, applies to specific goods, namely certain welder parts, and pertains to the concessions on customs duties for these goods. This Act enables the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) which lower the duty on specified goods, provided the application for such a concession meets the core criteria outlined in the Act. Specifically, the CEO must be satisfied that no substitutable goods were produced in Australia at the time the application was lodged. This particular TCO was made in response to an application by Bluescope Steel, who sought the concession for certain welder parts, leading to a tariff reduction from 5% to free. The instrument’s jurisdictional reach is national, as it falls under the purview of the Commonwealth. There are no stated exclusions or exemptions in this specific TCO, although the Act itself excludes certain goods from being subject to TCOs. The application of the TCO is not restricted by any subordinate instruments in this instance but is bound by the broader provisions of the Customs Act and associated regulations.
Key Provisions
The main operative sections of this legislation are sections 269C, 269P, and 269K of the Customs Act 1901, and the associated Tariff Concession Order No. 1108472. Section 269C stipulates that a Tariff Concession Order (TCO) application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (s 269C). Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that an application meets the core criteria, they must make a written order (TCO) (s 269P(3)). Section 269K(1) requires the CEO to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO (s 269K(1)). Tariff Concession Order No. 1108472 was made on 30 May 2011, declaring that certain welder parts are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, as the CEO was satisfied that no substitutable goods were produced in Australia.
The obligations and requirements imposed by the Act on the parties it governs are primarily on the CEO of Customs. The CEO must assess whether a TCO application meets the core criteria, which include determining whether no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (s 269C). If the application meets these criteria, the CEO must make a written TCO (s 269P(3)). Additionally, the CEO is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting submissions from any person who considers there are reasons why the TCO should not be made (s 269K(1)). The CEO must also ensure that the rights of persons (other than the Commonwealth) as at the date of registration are not adversely affected and that no liabilities are imposed on any person in respect of actions taken before the date of registration.
There are no specific offences, penalties, or civil/criminal consequences for breach mentioned in the explanatory statement. However, the failure to comply with the obligations under the Act, such as not correctly assessing whether a TCO application meets the core criteria or not publishing a notice in the Gazette as required, could lead to legal challenges or disputes regarding the validity of the TCO. The explanatory statement does not detail any specific penalties or consequences for such breaches, but they would likely be addressed under the general administrative law principles and any relevant legislative provisions.