EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1129949
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 rangefinders on 02 September 2011.
Instrument
TCO No 1129949 was made on 28 November 2011. It declares that those certain rangefinders 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. 1129949 is taken to have come into force on 02 September 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 Parliament of Australia, establishes a framework for the imposition of customs duties on imported goods. This Act facilitates the application for Tariff Concession Orders (TCOs) to provide tariff concessions for specific goods, reducing customs duty rates. The policy objective is to encourage the production and consumption of certain goods within Australia by lowering their customs duty rates when no equivalent Australian-made products exist. The Tariff Concession Instrument No. 1129949, issued under this Act, pertains to an application by Bluescope Steel Ltd for a TCO on certain rangefinders. The instrument declares these rangefinders as goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, effectively reducing the duty rate from 5% to free. This measure was introduced to address the absence of substitutable goods produced in Australia, thereby promoting the importation of these specific rangefinders.
Scope and Application
The Customs Act 1901 provides a framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs) as outlined in Part XVA. The Act applies to any person or entity seeking to import goods into Australia and to the Chief Executive Officer of Customs, who is responsible for making TCOs. The geographic and jurisdictional reach of the Act is national, as it pertains to the importation of goods into Australia. The Act does not apply to goods specified in section 269SJ, which are ineligible for TCOs, such as certain firearms, tobacco products, and controlled substances. The application of the Act can be extended or restricted through subordinate instruments, including regulations and subsidiary legislation. For instance, Instrument TCO No. 1129949, made under the Act, specifically applies to certain rangefinders, granting them a free rate of duty under item 50 of Schedule 4 to the Customs Tariff Act 1995. The TCO came into force on the date the application was lodged, 2 September 2011, and does not affect the rights of any person as at the date of registration to disadvantage them or impose liabilities for actions taken before the TCO's registration.
Key Provisions
The main operative sections of the Tariff Concession Order No. 1129949 under the Customs Act 1901 (section 269F) allow for the application by a person to the Chief Executive Officer of Customs for a Tariff Concession Order (TCO) regarding certain goods. Section 269C outlines the core criteria that must be satisfied for a TCO to be granted, primarily focusing on whether substitutable goods are produced in Australia. If the CEO is satisfied that the application meets these criteria, they are required under section 269P(3) to issue a written TCO, specifying the applicable item in the Customs Tariff Act 1995. The TCO declares that the goods in question are subject to a lower rate of duty, or in some cases, no duty at all.
The Act imposes several obligations and requirements on the parties involved. An applicant, such as Bluescope Steel Ltd, must submit an application to the CEO, ensuring that it complies with the conditions set out in section 269SJ, which excludes certain goods from TCO eligibility. The CEO, upon receiving a valid application, must evaluate it against the criteria in section 269C. If satisfied, the CEO must issue a TCO and publish a notice in the Gazette inviting any objections (subsection 269K(1)). In the case of TCO No. 1129949, no objections were received, leading to the issuance of the order on 28 November 2011. The order came into effect on the date of application, 02 September 2011, as per subsection 269S(1).
The consequences for non-compliance with the Act and the TCO are significant. While the Explanatory Statement does not detail specific offences or penalties under the Customs Act 1901, breaches of customs regulations generally can lead to substantial penalties. For example, section 226 of the Customs Act 1901 imposes penalties for offences such as smuggling, evasion of duty, and providing false information, with penalties that can include fines and imprisonment. Furthermore, section 234A of the Act addresses the civil penalty provisions, where an individual or entity may be liable to a pecuniary penalty for breaches of the Act. The maximum penalties for serious offences can include fines of up to $22,000 and, in the case of corporate entities, even higher fines. These provisions underscore the importance of compliance with the Act and the TCO.