EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1119734
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 Ltd applied for a TCO in respect of certain stabiliser roll parts on 20 June 2011.
Instrument
TCO No 1119734 was made on 05 September 2011. It declares that those certain stabiliser roll 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. 1119734 is taken to have come into force on 20 June 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 Tariff Concession Instrument No. 1119734, enacted under the Customs Act 1901, addresses the problem of ensuring that certain goods, specifically stabiliser roll parts, which are not produced in Australia, are subject to a lower customs duty rate. This initiative was introduced to assist Australian businesses by making imported goods more competitively priced. The instrument was made by the Chief Executive Officer of Customs following an application by Bluescope Steel Ltd on 20 June 2011. Pursuant to section 269F of the Act, the CEO was satisfied that the application met the core criteria, as no substitutable goods were produced in Australia. Consequently, the instrument declares that the specific stabiliser roll parts are to be treated under item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty rate of free, down from the general rate of 5%. The instrument aims to facilitate trade by reducing the cost of imported goods, thereby supporting Australian industry without imposing new liabilities on businesses or affecting existing rights.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a mechanism for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that lower the rate of customs duty on certain goods. This process is applicable to any person or entity that meets the criteria outlined in the Act, specifically those seeking a concession on goods that are not produced in Australia in the ordinary course of business and have no substitutable goods available domestically. The geographic scope of this legislation is national, as it pertains to the Commonwealth of Australia, and it applies to all goods that fall under the purview of the Customs Act 1901. Section 269SJ of the Act lists goods that are ineligible for tariff concessions, thereby setting explicit exclusions within the scope of the legislation. The Act may also extend or restrict its application through subordinate instruments, such as regulations or orders, though the primary provisions and their application are contained within the Customs Act itself. The Tariff Concession Instrument No. 1119734, for instance, exemplifies how specific goods, such as certain stabiliser roll parts, can receive a tariff concession under the oversight of the CEO, who must ensure compliance with the core criteria before issuing such orders.
Key Provisions
The Tariff Concession Instrument No. 1119734, under section 269F of the Customs Act 1901, facilitates the application for a Tariff Concession Order (TCO) by any person seeking lower customs duty rates on specified goods. The CEO of Customs must determine if the application pertains to goods excluded by section 269SJ of the Act, which lists goods ineligible for a TCO. If the application is deemed valid, the CEO evaluates whether it meets the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia at the time of application. Section 269B further defines key terms such as 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods'. If the application meets the criteria, the CEO issues a written TCO, as mandated by section 269P(3), specifying the applicable customs duty rate from the Customs Tariff Act 1995.
The obligations imposed by the Customs Act 1901 on the parties governed by this legislation include the duty of the CEO to meticulously assess TCO applications against the specified criteria. The CEO must also ensure that any TCO application not involving ineligible goods is published in the Gazette, as per subsection 269K(1), inviting any interested parties to submit objections or reasons against the concession. Additionally, the CEO must ensure that the TCO does not retroactively affect the rights or impose new liabilities on any person other than the Commonwealth, as clarified under subsection 269S(1) and paragraph 126(1)(r) of the Regulations. Importers who have already paid higher duties on the specified goods since the effective date of the TCO can apply for a refund, which is a benefit directly accruing from the TCO.
The Customs Act 1901 does not explicitly outline specific offences, penalties, or civil/criminal consequences for breaches related to TCOs. However, the failure to comply with the procedural requirements for applying for or issuing a TCO could potentially lead to disputes or legal challenges, which may involve judicial review or other administrative remedies. While the Act does not detail maximum penalties, the enforcement of its provisions is overseen by the Commonwealth, which may impose sanctions or corrective measures in cases of non-compliance.