EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1135149
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 integrated ultrafiltration and reverse osmosis machines on 19 October 2011.
Instrument
TCO No 1135149 was made on 12 January 2012. It declares that those certain integrated ultrafiltration and reverse osmosis machines 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. 1135149 is taken to have come into force on 19 October 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 was amended to introduce the scheme for Tariff Concession Orders (TCOs) to provide tariff relief for imported goods under specific conditions. Enacted by the Australian Parliament, this scheme aims to support industries where production of certain goods in Australia is not economically viable. In this context, Tariff Concession Instrument No. 1135149 was introduced to provide a tariff concession for integrated ultrafiltration and reverse osmosis machines, addressing the gap where such goods could not be produced domestically. The policy objective is to facilitate the import of these goods without incurring the usual customs duty, thereby benefiting industries that rely on these imported products. The Tariff Concession Order No. 1135149, made on 12 January 2012, declares that these specific machines are subject to a free rate of duty, effective from 19 October 2011, the date the application was lodged.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders allow for a lower rate of customs duty on certain goods, provided the application for a TCO meets the core criteria set out in the Act. This includes ensuring that no substitutable goods are produced in Australia at the time the application is lodged, as defined under sections 269D and 269E of the Act. Once the CEO is satisfied that the application meets these criteria, they are required to issue a written TCO. The scope of the Act includes all entities and individuals involved in the importation of goods that may benefit from a TCO, with the application process being open to any person who wishes to apply. The geographic reach of the Act is national, as it is a Commonwealth Act, but the application and effect of any TCO are specific to the goods covered by the order. The Act does not apply to goods specified in section 269SJ, which are explicitly excluded from the tariff concession scheme. The TCO process includes a requirement for public consultation, although in the case of TCO No. 1135149, no submissions were received. The commencement date of the TCO is the date the application was lodged, and the TCO does not affect the rights of persons other than the Commonwealth in relation to actions taken before the TCO was registered.
Key Provisions
The Tariff Concession Instrument No. 1135149, made under the Customs Act 1901, outlines the process and criteria for the Chief Executive Officer of Customs (CEO) to grant Tariff Concession Orders (TCOs). Section 269F of the Act allows individuals or entities to apply for a TCO in relation to specific goods. If the application does not pertain to goods listed in section 269SJ, which are ineligible for a TCO, the CEO assesses the application against the core criteria outlined in section 269C. A TCO application is considered to meet the core criteria if, on the date of application, no substitutable goods are being produced in Australia in the ordinary course of business, as per section 269C and 269P(3).
The CEO must then issue a written order, the TCO, declaring that the specified goods are subject to a prescribed tariff item in Schedule 4 of the Customs Tariff Act 1995. This instrument specifically pertains to certain integrated ultrafiltration and reverse osmosis machines, where the general rate of duty is 5%, but under the TCO, the duty is free. Section 269K(1) requires the CEO to publish a notice in the Gazette, inviting submissions from any person who may have reasons to oppose the TCO. In this case, no submissions were received.
In terms of obligations, the CEO is required to make a decision on the TCO application based on the criteria set out in the Act. The TCO instrument also stipulates that it does not affect the rights of any person as of the date of registration and does not impose any new liabilities. It is effective from the date the application was lodged, in this instance, 19 October 2011. Importers of the specified goods can apply for a refund of duty paid on goods imported since the effective date of the TCO.
In relation to offences and penalties, the Act does not specify any direct criminal or civil penalties for breaches of the TCO provisions. However, any misuse of the concession, such as importing non-qualifying goods or fraudulent applications, could potentially lead to penalties under broader customs laws. The primary focus of the legislation is on the procedural correctness and adherence to the criteria for granting TCOs, rather than imposing specific penalties for non-compliance with the TCO itself.