EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1138151
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 main drive parts on 15 November 2011.
Instrument
TCO No 1138151 was made on 08 February 2012. It declares that those certain main drive parts 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. 1138151 is taken to have come into force on 15 November 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 Commonwealth Parliament, establishes a framework for the imposition of customs duty on imported goods. To address specific economic and trade policy objectives, the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can reduce the rate of customs duty on certain goods. This legislative mechanism was introduced to support industry competitiveness and economic efficiency by ensuring that Australian industries do not face undue burdens from customs duties, particularly in cases where no suitable Australian-produced alternatives exist. Instrument No. 1138151, made under the Act on 8 February 2012, is an example of a TCO applied to certain main drive parts, reducing the duty from 5% to free, effective from the date of the application, 15 November 2011. This concession was granted following a determination by the CEO that no substitutable goods were produced in Australia, and no objections were received during the consultation period.
Scope and Application
The Tariff Concession Instrument No. 1138151, made under the Customs Act 1901, applies to specific goods, namely certain main drive parts, which are subject to a Tariff Concession Order (TCO) granted by the Chief Executive Officer of Customs. This instrument is enacted to provide a lower rate of customs duty on these goods, which is free of charge as opposed to the general rate of 5% applicable to similar items. The Act applies to any person or entity seeking to import these specific goods into Australia, with the instrument coming into effect on the date the application for the TCO was lodged, 15 November 2011. The geographic reach of this legislation is national, as it pertains to customs duties throughout Australia. The Act does not extend or restrict application through subordinate instruments but is subject to the core criteria outlined in the Customs Act 1901, including the requirement that no substitutable goods were produced in Australia in the ordinary course of business at the time of application. Additionally, this TCO does not affect the rights of any person as at the date of registration and does not impose any liabilities on any person other than the Commonwealth.
Key Provisions
The main operative sections of this legislation, specifically sections 269C, 269F, 269K, and 269S, establish the framework for the creation and implementation of Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO is satisfied that the application is valid and meets the core criteria, they must make a written order (a TCO) as specified in section 269C. Section 269K requires the CEO to publish a notice in the Gazette inviting submissions on the TCO application, while section 269S specifies that a TCO is taken to have come into force on the day the application was lodged.
The obligations and requirements imposed by the Customs Act 1901 on the parties governed by this legislation include the duty of the CEO to evaluate TCO applications against the core criteria, which are detailed in section 269C. The CEO must ensure that no substitutable goods are produced in Australia in the ordinary course of business before granting a TCO. The Act also mandates the CEO to publish a notice in the Gazette inviting any interested parties to submit their views on the proposed TCO. In this particular case, Bluescope Steel's application for a TCO was evaluated, and since no substitutable goods were produced in Australia, the CEO issued TCO No. 1138151, which declares that certain main drive parts are subject to a reduced duty rate.
The legislation outlines potential consequences for breaches of its provisions. While specific offences, penalties, or consequences are not detailed in the provided text, the general framework of the Customs Act 1901 would apply. Breaches of the Act could lead to criminal or civil penalties, which might include fines or imprisonment, depending on the nature and severity of the offence. The exact penalties would be determined in accordance with the broader provisions of the Customs Act 1901 and any related regulations.
The Tariff Concession Order No. 1138151, which was issued on 8 February 2012, declares that certain main drive parts are subject to a free rate of duty, as opposed to the general rate of 5%. This concession applies from 15 November 2011, the date on which the application was lodged. Importantly, this order does not affect the rights of any person, except the Commonwealth, in a manner that would disadvantage them or impose liabilities for actions taken before the registration date. Importers, however, will benefit from this TCO as they can apply for a refund of duty on goods imported since the effective date of the order.