EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1121513
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 chain and bucket elevator parts on 30 June 2011.
Instrument
TCO No 1121513 was made on 26 September 2011. It declares that those certain chain and bucket elevator 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. 1121513 is taken to have come into force on 30 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 Customs Act 1901, enacted by the Australian Parliament, establishes a framework for the application of customs duties and provides a mechanism for tariff concessions through Tariff Concession Orders (TCOs). The primary purpose of the legislation is to facilitate trade by offering reduced customs duties on specific goods, provided certain conditions are met. Specifically, the Act allows for TCOs where no substitutable goods are produced in Australia, thereby encouraging the import of necessary goods that are not domestically manufactured. The process for applying for a TCO involves an application to the Chief Executive Officer of Customs, who must determine whether the application meets the core criteria set out in the Act. If satisfied, the CEO issues a TCO, granting a lower rate of customs duty for the specified goods. The policy objective is to support economic efficiency and consumer choice by reducing the cost of imported goods that are not produced locally.
Tariff Concession Instrument No. 1121513 was introduced under the Customs Act 1901 to provide a tariff concession for certain chain and bucket elevator parts. This instrument was enacted in response to an application by Bluescope Steel, which sought a lower customs duty rate for these specific goods. The Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, thus meeting the criteria for a TCO. As a result, the instrument declares that these goods are subject to a free rate of duty, down from the general rate of 5%. The instrument aims to benefit importers by reducing their duty costs and does not impose any liabilities or disadvantage other persons under the Act.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides for Tariff Concession Orders (TCO) which can be applied for by a person seeking a lower rate of customs duty for goods. The Act applies to any individual or entity wishing to import goods that are not produced in Australia and for which no substitutable goods are produced domestically in the ordinary course of business. The process involves the Chief Executive Officer of Customs (CEO) evaluating the application against the core criteria, including the absence of substitutable goods in Australia and ensuring that the goods in question are not excluded under section 269SJ of the Act. The geographic reach of this legislation is national, as it pertains to the importation of goods into Australia. The Act does not specify any exclusions or exemptions beyond those noted in section 269SJ. The application of the Act can be extended or restricted through subordinate instruments, although the primary legislation itself does not delineate these in detail. The Tariff Concession Order No. 1121513, for example, was created to provide a tariff concession for certain chain and bucket elevator parts, effectively reducing the duty rate from 5% to free, following a successful application by Bluescope Steel.
Key Provisions
The Customs Act 1901 (the Act) includes provisions for the creation of Tariff Concession Orders (TCOs) through section 269F. When a person applies for a TCO under section 269F, the Chief Executive Officer of Customs (the CEO) must assess whether the application meets the core criteria specified in section 269C. If the CEO determines that the application is valid and meets the core criteria, they are required to make a written order, a TCO, specifying the goods and the applicable tariff rate. The specific tariff rate for the goods in question is then set out in the order, with section 269P(3) indicating that the order must declare which prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies to the goods.
The Act imposes specific obligations on applicants for TCOs and the CEO. Applicants must ensure that their applications comply with the core criteria set out in section 269C, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The CEO has the responsibility of assessing applications to determine if they meet the criteria, and if so, making the appropriate TCO. Furthermore, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting any person who believes there are reasons the TCO should not be made to submit their views.
There are no specific offences or penalties outlined in the Explanatory Statement for the failure to comply with the TCO process or for non-compliance with the terms of a TCO. However, it is implicit that any misuse or fraudulent application for a TCO could lead to legal consequences under broader provisions of the Customs Act 1901 or related legislation. The general principle would be that any deliberate misrepresentation or fraudulent behaviour in applying for or using a TCO could result in civil or criminal penalties, although these are not detailed in the Explanatory Statement.