EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1116076
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.
Bluscope Steel (AIS) Pty Ltd applied for a TCO in respect of certain seam welder parts on 20 May 2011.
Instrument
TCO No 1116076 was made on 08 August 2011. It declares that those certain seam 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. 1116076 is taken to have come into force on 20 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, establishes a framework for the administration of customs duties and provides mechanisms for tariff concessions. The Act facilitates the reduction or exemption of customs duties on specific goods through Tariff Concession Orders (TCOs), which can be applied for by interested parties. These concessions aim to support Australian industries by reducing the cost of imported goods that do not have local substitutes, thereby encouraging economic growth and competitiveness. The process for making TCOs is outlined in Part XVA of the Act, which was introduced to address the need for a streamlined method of granting tariff reductions that benefit specific industries. The explanatory statement for Instrument No. 1116076 indicates that this particular TCO was introduced in response to an application from Bluscope Steel (AIS) Pty Ltd, granting them tariff concessions on certain seam welder parts to enhance their competitiveness within the Australian market.
Scope and Application
The Customs Act 1901 provides a framework through which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs. These orders apply to specific goods, granting a lower rate of customs duty when the application meets the core criteria, which include the absence of substitutable goods produced in Australia in the ordinary course of business. The legislation applies to individuals and entities that submit applications for TCOs, with a focus on the importation of goods into Australia. The geographic reach of this Act is national, as it pertains to the Commonwealth level of government, impacting customs practices across Australia. There are exclusions stipulated in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The application of the Act can be extended or restricted through subordinate instruments, which are not specified in detail within the provided text. The TCO in question, No. 1116076, specifically pertains to certain seam welder parts, reducing the duty rate from 5% to free, and it came into force on the date the application was lodged, 20 May 2011.
Key Provisions
The main operative sections of this legislation include section 269F, which allows an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. Section 269C of the Customs Act 1901 sets out the core criteria that must be satisfied for the CEO to consider making a TCO. If the CEO determines that no substitutable goods are produced in Australia, and the application complies with the other requirements, they must make a written order declaring the goods subject to the TCO. In this case, TCO No 1116076 applies to certain seam welder parts and declares that these goods are subject to a rate of duty of free, as opposed to the general rate of duty of 5%.
The Customs Act 1901 imposes certain obligations on the parties involved in the TCO process. The CEO is responsible for assessing TCO applications to determine whether they meet the core criteria, as outlined in section 269C. If the CEO is satisfied that the application meets these criteria, they must make a written order in the form of a TCO. Additionally, section 269K 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 considers that there are reasons why the TCO should not be made to lodge a submission with the CEO.
Breaching the provisions of the Customs Act 1901 or failing to comply with the obligations imposed by the Act may result in various penalties or consequences. The Act does not specify the exact penalties for non-compliance, but it is likely that any breaches would be subject to the general penalties and enforcement mechanisms available under the Customs Act 1901. These may include fines, imprisonment, or both, depending on the nature and severity of the breach. Furthermore, any person who suffers a loss or disadvantage as a result of a breach of the Act may be entitled to seek redress through civil proceedings.
In summary, this legislation provides a framework for the creation of Tariff Concession Orders under the Customs Act 1901. It outlines the process for applying for a TCO, the core criteria that must be satisfied for the CEO to consider making a TCO, and the obligations imposed on the CEO in assessing TCO applications. The legislation also sets out the commencement date for TCOs and the rights of importers to apply for a refund of duty on goods imported since the TCO came into force. Finally, it is important to note that any breaches of the Customs Act 1901 or failure to comply with the obligations imposed by the Act may result in penalties or consequences for the parties involved.