EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1124754
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 blowers on 26 July 2011.
Instrument
TCO No 1124754 was made on 31 October 2011. It declares that those certain blowers 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. 1124754 is taken to have come into force on 26 July 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 and provides the legal framework for the administration of customs duties and other import and export-related regulations. The Act was introduced to address the need for a structured and efficient system to regulate the movement of goods across Australia's borders. The Tariff Concession Instrument No. 1124754, enacted under the Customs Act 1901, aims to facilitate the import of specific goods by providing tariff concessions. This particular instrument was introduced in response to an application from Bluescope Steel for tariff concessions on certain blowers, which were determined to have no substitutable goods produced in Australia at the time of application. The instrument, which came into force on 26 July 2011, provides for a zero rate of customs duty on these specified goods, as opposed to the general rate of 5%. The policy objective behind this measure is to ensure that Australian importers of these goods can benefit from reduced tariffs, thereby promoting economic efficiency and competitiveness.
Scope and Application
The Customs Act 1901, specifically Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislative mechanism allows for reduced rates of customs duty on specified goods, provided certain criteria are met. An application for a TCO can be made by any person, and if the CEO determines that the application pertains to goods not excluded under section 269SJ, the application will be assessed against the core criteria set out in section 269C of the Act. These criteria require confirmation that no substitutable goods are produced in Australia in the ordinary course of business on the date the application is lodged. If the CEO is satisfied with the application, a TCO is issued, effectively applying a prescribed lower tariff rate to the specified goods. The geographic reach of this legislation is national, applying across Australia. There are no stated exclusions or exemptions beyond those specified in section 269SJ, and the application of the Act is not extended or restricted through subordinate instruments. The TCOs, once issued, come into effect on the date the application was lodged, ensuring that the rights of importers are beneficially affected without imposing any liabilities on any person.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 1124754 are sections 269C, 269F, 269P(3), and 269S. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). If the application is not in respect of goods specified in section 269SJ, the CEO must determine whether the application meets the core criteria set out in section 269C. If the CEO is satisfied that the application meets these criteria, they must make a written order declaring that the goods are subject to a prescribed rate in Schedule 4 of the Customs Tariff Act 1995 (section 269P(3)). A TCO is considered to come into force on the day the application is lodged (section 269S).
The obligations and requirements imposed by the Act on the parties or entities it governs include the need for applicants to ensure that their applications for TCOs are not in respect of goods specified in section 269SJ of the Customs Act 1901. The CEO has a duty to assess the core criteria set out in section 269C to determine whether an application is valid and to publish a notice in the Gazette inviting submissions from any interested parties (subsection 269K(1)). If no submissions are received, the CEO must proceed to make the TCO. Additionally, section 269S(1) mandates that the TCO is effective from the date the application was lodged, and it does not affect any rights or impose liabilities on persons other than the Commonwealth in respect of actions taken before the TCO is registered.
There are no specific offences, penalties, or civil/criminal consequences outlined in the explanatory statement for breaches of the provisions related to TCOs. However, it is implied that failure to comply with the requirements or acting in a manner inconsistent with the provisions of the Customs Act 1901 and its regulations could lead to legal repercussions. The explanatory statement does not specify maximum penalties, but general penalties for breaches of customs regulations can include fines and imprisonment as stipulated by the relevant legislation.