EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1129608
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 inverters on 31 August 2011.
Instrument
TCO No 1129608 was made on 28 November 2011. It declares that those certain inverters 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. 1129608 is taken to have come into force on 31 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. 1129608, enacted under the Customs Act 1901, was introduced to address the need for tariff concessions on specific goods to support industry and economic growth. This legislation allows the Chief Executive Officer of Customs to reduce or eliminate customs duty on certain goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. The policy objective of this measure is to stimulate investment and enhance competitiveness in the targeted sectors by making imported goods more affordable. Bluescope Steel Ltd's application for tariff concessions on certain inverters exemplifies this legislative intent, as it aims to reduce the duty on these goods from 5% to free, benefiting the industry and potentially the broader economy. The instrument came into force on the date of the application, 31 August 2011, and no submissions were received in opposition to the tariff concession.
Scope and Application
The Tariff Concession Instrument No. 1129608 pertains to the Customs Act 1901, specifically under Part XVA, which governs the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This legislation applies to entities or individuals seeking to import goods for which a lower rate of customs duty is applicable. The TCOs are issued in response to applications where the CEO determines that the applicant's goods are not among those specified in section 269SJ of the Act and that the application meets the core criteria outlined in sections 269C, 269D, 269E, and 269F. The instrument affects the import of specified goods, in this case, certain inverters, by granting them tariff concessions, effectively reducing the customs duty from the general rate of 5% to free. The scope of this legislation is national, applying across Australia as per the Customs Act 1901, and it does not impose any liabilities on any person. Moreover, the commencement date of the TCO is aligned with the date of the application, 31 August 2011, with the TCO No. 1129608 coming into force on that date. Importantly, the TCO does not disadvantage any person or impose liabilities in respect of anything done or omitted before its registration.
Key Provisions
The Customs Act 1901, under section 269F, enables individuals or entities to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) concerning specific goods. When a TCO application is submitted, the CEO is obligated, per section 269SJ, to first ensure that the goods in question are not specified in the list of ineligible items, which are those that cannot be subject to a TCO. Assuming the goods are eligible, the CEO must then determine if the application meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. "Substitutable goods" are defined in section 269B as those produced in Australia that could be used for the same purpose as the goods in the TCO application.
The obligations imposed by the Customs Act 1901 on the CEO, as outlined in section 269P(3), include making a written order if satisfied that the application meets the core criteria. This order declares that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995, which reduces the rate of customs duty. Furthermore, under section 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit any objections to the proposed TCO. In the case of TCO No. 1129608, which was made for certain inverters on 28 November 2011, no submissions were received.
Failure to comply with the requirements of the Customs Act 1901 may result in civil or criminal consequences. Under section 269T of the Act, a person who knowingly makes a false or misleading statement in an application for a TCO may be liable to a penalty of up to 10,000 penalty units or imprisonment for five years, or both. The Act also stipulates that the imposition of penalties does not affect the rights of individuals as at the date of registration, ensuring that no one is disadvantaged or subjected to liabilities for actions taken before the TCO came into force. The TCO itself does not impose any liabilities on any person, but it does enable importers to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force, as provided under paragraph 126(1)(r) of the Regulations.