EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1131380
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 (AIS) Pty Ltd applied for a TCO in respect of certain screw jacks on 13 September 2011.
Instrument
TCO No 1131380 was made on 06 December 2011. It declares that those certain screw jacks 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. 1131380 is taken to have come into force on 13 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 Tariff Concession Instrument No. 1131380, enacted under the Customs Act 1901, was introduced to address the need for a streamlined process to grant tariff concessions on specific imported goods. This instrument, issued by the Chief Executive Officer of Customs, allows for the application of a lower rate of customs duty on goods that are subject to a Tariff Concession Order (TCO). The core objective of this legislation is to facilitate the importation of goods by reducing or eliminating customs duty, thereby supporting businesses and consumers by lowering the cost of imported goods. The instrument was established to ensure that tariff concessions are granted in a fair and transparent manner, with an opportunity for public consultation before the final decision is made.
The enacting body responsible for this legislation is the Parliament of Australia, which established the framework for Tariff Concession Orders within the Customs Act 1901. The policy objective is to support the efficient operation of the Australian economy by enabling the importation of goods at a reduced tariff rate, provided that no substitutable goods are produced in Australia. This approach helps to protect Australian industries from undue competition while still allowing businesses to access necessary imported goods at a lower cost. The Customs Act 1901, amended by this instrument, ensures that the process for obtaining a TCO is both accessible and responsive to the needs of applicants, promoting economic growth and consumer welfare.
Scope and Application
The Customs Act 1901, specifically Part XVA, provides a framework through which the Chief Executive Officer of Customs can grant Tariff Concession Orders (TCO) to lower the rate of customs duty on certain goods. This legislation applies to any person or entity seeking to import goods that qualify for such concessions, provided that the goods are not specified in section 269SJ of the Act which outlines those goods ineligible for a TCO. The application process requires the CEO to verify that no substitutable goods are being produced in Australia in the ordinary course of business, as defined by the Act, before a TCO can be issued. The geographic reach of this legislation is national, impacting all importers across Australia. The instrument extends the application of the Act through subordinate instruments such as the Customs Tariff Act 1995, which specifies the schedule of duties and concession rates. This particular TCO, Instrument No. 1131380, applies to certain screw jacks and was effective from the date of the application, 13 September 2011. The TCO does not retroactively affect any rights or liabilities of persons other than the Commonwealth and offers benefits to importers who can apply for refunds of duties paid on such goods since the effective date of the concession.
Key Provisions
The key operative sections of Tariff Concession Instrument No. 1131380 (sections referenced in parentheses) require the Chief Executive Officer of Customs (the CEO) to consider applications for Tariff Concession Orders (TCOs) under section 269F of the Customs Act 1901. If an application is deemed valid and meets the core criteria outlined in sections 269B and 269C, the CEO must make a TCO, which is a written order specifying that the goods in question are subject to a lower rate of customs duty (subsection 269P(3)). This particular TCO, No. 1131380, concerns certain screw jacks, declaring them subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty rate of free rather than the general rate of 5% (subsection 269S(1)).
The obligations and requirements imposed by the Act on parties or entities it governs include the necessity for the CEO to ensure that applications for TCOs are assessed against the core criteria, which involves verifying that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. This process is critical to determine the eligibility of goods for tariff concessions. Additionally, the CEO is mandated to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission (subsection 269K(1)). In this instance, no submissions were received in response to the notice for TCO No. 1131380.
Any breach of the requirements set forth by the Customs Act 1901 can lead to various civil or criminal consequences, depending on the nature and severity of the violation. The Act provides for penalties, which may include fines and imprisonment, although the specifics of such penalties are not detailed in the Explanatory Statement. For instance, making false statements in an application for a TCO could result in significant penalties, reflecting the seriousness with which the Act treats the integrity of the tariff concession process. The Act's provisions are designed to ensure that the tariff concession scheme operates fairly and efficiently, protecting both the interests of the Commonwealth and the rights of importers and other stakeholders.