EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1114058
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 motors on 03 May 2011.
Instrument
TCO No 1114058 was made on 25 July 2011. It declares that those certain 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. 1114058 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 was enacted by the Australian Parliament to establish a framework for the regulation of customs and excise duties. One of the critical instruments under this Act is the Tariff Concession Order (TCO) scheme, which was introduced to address the need for tariff reductions on certain imported goods under specific conditions. The Tariff Concession Instrument No. 1114058, made under this scheme, aims to provide tariff concessions for certain motors imported by Bluescope Steel. This instrument was introduced to ensure that if no substitutable goods are produced in Australia, the applicant can benefit from a reduced customs duty rate. The policy objective is to foster economic efficiency by allowing the importation of goods that cannot be produced domestically, thereby supporting industries that rely on imported components. The instrument became effective on the date the application was lodged, 03 May 2011, and does not impose any liabilities on persons other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 1114058 is a regulation made under the Customs Act 1901, which applies to the concession of tariff rates for specific goods. This instrument, which came into effect on 03 May 2011, provides a tariff concession for certain motors, reducing the duty rate from 5% to free, subject to the conditions outlined in the Customs Act 1901. The application of this tariff concession is specific to goods that meet the core criteria, particularly where no substitutable goods are produced in Australia in the ordinary course of business. The instrument was implemented following an application by Bluescope Steel and after a review by the Chief Executive Officer of Customs, who determined that the application met the required criteria. The instrument does not affect any existing rights or impose any new liabilities on persons other than the Commonwealth, and it allows for potential duty refunds to importers for goods imported since the date of the instrument's effect.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 1114058 (F2012L00527) relate to the application and approval process for Tariff Concession Orders (TCOs) under section 269F of the Customs Act 1901. A TCO is a written order made by the Chief Executive Officer of Customs (CEO) that applies a lower rate of customs duty to specified goods. Section 269C outlines the core criteria for a TCO application to be approved: the goods must not have substitutable goods produced in Australia in the ordinary course of business. Section 269B provides definitions for key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods." If the CEO is satisfied that these criteria are met, they are required under section 269P(3) to issue a TCO.
The obligations and requirements imposed by the Act on the parties involved are primarily procedural. The CEO must ensure that any TCO application is assessed against the core criteria specified in the Act. Once an application is deemed valid, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections or submissions within a specified timeframe (subsection 269K(1)). The CEO's decision to grant a TCO must be based on a thorough evaluation of whether the core criteria are satisfied. In the case of Instrument TCO No. 1114058, the CEO determined that the application met these criteria, leading to the issuance of the TCO for certain motors on 25 July 2011.
Any breaches of the provisions under the Customs Act 1901 or associated regulations can lead to civil or criminal consequences. Although the explanatory statement does not specify penalties for breaches directly related to TCOs, general breaches of the Customs Act can result in significant penalties. For instance, under section 259A of the Act, a person can be liable for a pecuniary penalty of up to $22,200 for a single contravention of the Act. Additionally, section 283 of the Act empowers authorised officers to take enforcement actions, which can include fines, imprisonment, or both, depending on the severity and intent of the breach.
In summary, Tariff Concession Instrument No. 1114058 establishes a mechanism for reducing customs duties on specific goods, provided certain criteria are met. The CEO has the responsibility to assess applications and ensure compliance with the statutory requirements. The rights and obligations of parties, particularly importers, are clearly defined, with potential penalties for non-compliance outlined in the broader Customs Act framework.