EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1127009
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 gearboxes on 10 August 2011.
Instrument
TCO No 1127009 was made on 31 October 2011. It declares that those certain gearboxes 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. 1127009 is taken to have come into force on 10 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs) to provide relief from certain duties. The problem or gap this legislation aims to address is the potential economic disadvantage faced by businesses importing specific goods when no equivalent product is manufactured domestically. By allowing the Chief Executive Officer of Customs to grant tariff concessions under specific conditions, the Act seeks to support Australian businesses and consumers by potentially reducing the cost of imported goods. This is achieved by providing a mechanism for tariff relief where no local substitute is available, thereby encouraging trade and competition. The policy objective of this legislation is to facilitate trade by reducing customs duties where appropriate, thereby supporting economic efficiency and consumer welfare.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 1127009, provides a framework for the application and issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This legislation applies to individuals and entities seeking to import goods into Australia that are not currently being produced domestically and thus qualify for reduced customs duty under specific conditions. The Act mandates that the CEO assess whether an application for a TCO meets the core criteria, particularly ensuring that no substitutable goods are produced in Australia in the ordinary course of business. The application of this legislation is national in scope, impacting all importers of the specified goods and ensuring consistency across jurisdictions in the application of tariff concessions. However, it does not apply to goods listed in section 269SJ of the Act, which are ineligible for TCOs.
The application process under this Act includes a requirement for the CEO to publish notices in the Gazette to invite submissions from interested parties, although the absence of submissions does not necessarily preclude the issuance of a TCO. The commencement date of a TCO is set as the date the application is lodged, which protects the rights of applicants and ensures that there are no retroactive disadvantages or liabilities imposed on any party. This legislation also extends its application through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the duty rates applicable to the goods subject to TCOs.
Key Provisions
The key provisions of Tariff Concession Instrument No. 1127009 under the Customs Act 1901 (the Act) relate to Tariff Concession Orders (TCOs) and their application to specific goods. Section 269F (1) of the Act allows for an application to be made to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of certain goods. If the CEO is satisfied that the application is valid and meets the core criteria outlined in section 269C, they must make a written order declaring that the goods are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff). In this case, TCO No. 1127009 was made on 31 October 2011, declaring that certain gearboxes are goods to which item 50 of Schedule 4 to the Tariff applies, with the general rate of duty on these goods being 5% and the rate of duty for the goods subject to the TCO being free.
The Act imposes several obligations and requirements on the parties involved. Section 269K (1) of the Act mandates that the CEO must publish a notice in the Gazette inviting any person who considers there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO must also ensure that the application meets the core criteria, which include the absence of substitutable goods produced in Australia in the ordinary course of business. In the case of TCO No. 1127009, the CEO did not receive any submissions, indicating no objections were raised to the TCO.
Under the Customs Act 1901, there are specific offences, penalties, or consequences for breaches of the Act. The Act does not explicitly state penalties for failing to comply with the requirements of a TCO. However, non-compliance with customs regulations generally can lead to various civil and criminal consequences. For example, knowingly making a false statement in a customs declaration can result in a penalty of up to five times the value of the duty evaded or an amount up to $22,000, whichever is greater, under section 235 of the Act. Additionally, any person who contravenes a direction or requirement under the Act may be subject to a pecuniary penalty, as outlined in section 287 of the Crimes Act 1914.