EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1114057
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 ac motors on 03 May 2011.
Instrument
TCO No 1114057 was made on 25 July 2011. It declares that those certain ac 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. 1114057 is taken to have come into force on 03 May 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 Parliament of Australia, facilitates the implementation of Tariff Concession Orders (TCOs) to provide preferential customs duty rates on specific goods, contingent on certain criteria being met. This Act was introduced to address the need for a streamlined process to grant tariff concessions, ensuring that importers benefit from reduced duty rates for goods where suitable domestic alternatives are not produced. The process involves an application to the Chief Executive Officer of Customs, who assesses whether the application meets the core criteria, including the absence of substitutable goods produced in Australia. Tariff Concession Instrument No. 1114057, made on 25 July 2011, is an example of this process in action, granting Bluescope Steel a tariff concession on certain AC motors, effective from 3 May 2011, under which the general duty rate of 5% was reduced to free duty, benefiting the rights of importers.
Scope and Application
The Tariff Concession Instrument No. 1114057 applies to entities that have applied for and are granted a Tariff Concession Order (TCO) under section 269F of the Customs Act 1901. Specifically, this instrument pertains to Bluescope Steel's application for a TCO in respect of certain ac motors, which was made on 03 May 2011. The Act enables the Chief Executive Officer of Customs to grant concessions on customs duty for specified goods, provided the application meets the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business at the time of application. The geographic reach of this Act is national, applying to all goods entering Australia and subject to the conditions specified within the Customs Act 1901. The instrument does not specify any exclusions or exemptions beyond those already detailed in the Act, which excludes certain goods from being subject to a TCO under section 269SJ. The application of this Act can be further defined through subordinate instruments, but this particular TCO does not extend or restrict its application beyond the terms stipulated in the Customs Act 1901.
Key Provisions
The Tariff Concession Instrument No. 1114057, under the Customs Act 1901, pertains to Tariff Concession Orders (TCOs) that can be made by the Chief Executive Officer of Customs (section 269F). This particular TCO, applied for by Bluescope Steel in respect of certain ac motors, was granted on 25 July 2011. Section 269C outlines that a 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. The CEO was satisfied that this condition was met, leading to the issuance of TCO No. 1114057, which applies a zero rate of duty on these ac motors, as opposed to the general rate of 5%.
The Act imposes certain obligations on parties seeking a TCO. An applicant must ensure that their application is not for goods specified in section 269SJ, which cannot be subject to a TCO. The CEO, on receiving a valid application, must determine if it meets the core criteria set out in section 269C. This includes verifying that no substitutable goods were produced in Australia at the time of application, with definitions for key terms provided in sections 269B, 269D, and 269E. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). Once the application is deemed valid and no objections are received, the CEO must make the TCO in writing, specifying the applicable tariff item from the Customs Tariff Act 1995 (subsection 269P(3)).
There are no explicit offences or penalties outlined in the Act for failing to meet the requirements of a TCO application. However, non-compliance with the provisions of the Customs Act 1901 generally can result in various civil and criminal consequences. These might include fines, imprisonment, or both, depending on the nature and severity of the breach. For example, under section 266 of the Customs Act, a person who knowingly makes a false statement or representation in an application for a TCO could face a penalty of up to five years imprisonment or a fine of up to $22,000, or both. Additionally, the Act may impose administrative penalties for incorrect or misleading information provided in the application process.