EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1126223
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 grinding wheels on 04 August 2011.
Instrument
TCO No 1126223 was made on 02 November 2011. It declares that those certain grinding wheels 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. 1126223 is taken to have come into force on 04 August 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. 1126223, enacted under the Customs Act 1901, was introduced to address the specific need for tariff concessions on certain imported goods, particularly grinding wheels in this instance. The legislation was developed to provide relief to businesses that import these goods by applying a reduced or free rate of customs duty, thereby making the goods more affordable and competitive within the Australian market. This instrument was enacted by the Chief Executive Officer of Customs, who has the authority to make such orders under section 269F of the Customs Act 1901. The policy objective underpinning this measure is to ensure that the application of tariff concessions supports the importation of goods that are not produced domestically, thereby enhancing market access and supporting economic efficiency.
Scope and Application
The Customs Act 1901, specifically Part XVA, outlines a framework for the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCOs), which apply lower rates of customs duty to certain goods. This Act applies to any person or entity seeking to import goods that are eligible for tariff concessions, provided the goods are not specified in section 269SJ as ineligible for such concessions. The application of a TCO is contingent on the CEO determining that no substitutable goods are produced in Australia in the ordinary course of business, as defined in sections 269D and 269E of the Act. Once the CEO is satisfied that the core criteria are met, they must issue a TCO, as was the case for Bluescope Steel’s application regarding certain grinding wheels. The TCOs are subject to national jurisdiction and can be extended or modified through subordinate instruments, although the primary legislation itself sets the foundational criteria and processes for concession eligibility.
Key Provisions
The Customs Act 1901, specifically under Part XVA, establishes the framework for Tariff Concession Orders (TCOs), which allow for reduced rates of customs duty on specified goods. An application for a TCO can be made by any person to the Chief Executive Officer (CEO) of Customs, as outlined in section 269F. If the CEO determines that the application is valid and pertains to goods not listed in section 269SJ, which includes goods ineligible for TCOs, the CEO must then assess whether the application meets the core criteria in section 269C. This involves confirming that, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. Should the CEO be satisfied that these criteria are met, they are mandated to issue a written TCO, as stipulated in section 269P(3).
The obligations imposed by the Act on the CEO include the thorough examination of TCO applications to ensure they meet the core criteria and the publication of notices in the Gazette to invite submissions from the public regarding the proposed TCOs, as per section 269K(1). In the case of TCO No. 1126223, the CEO did not receive any submissions opposing the concession for the specified grinding wheels, indicating public acceptance or lack of opposition to the order. The TCO is considered effective from the date the application was lodged, as per subsection 269S(1), thereby granting immediate benefits to the rights of importers to claim duty refunds for imports made since that date under paragraph 126(1)(r) of the Regulations.
Regarding the consequences of non-compliance, the Act does not explicitly detail specific offences, penalties, or civil/criminal consequences for breaches related to TCOs. However, the legislative framework ensures that the rights of individuals other than the Commonwealth are not adversely affected by the TCO, and no new liabilities are imposed. The primary focus appears to be on facilitating trade and reducing duty burdens where appropriate, with the understanding that any breaches would likely be addressed through general legal mechanisms or administrative actions as deemed necessary by the relevant authorities.