EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1138155
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 1138155 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. 1138155 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 Tariff Concession Instrument No. 1138155, enacted in 2012, amends the Customs Act 1901 by providing tariff concessions for specific goods. This instrument was introduced to address the need for tariff concessions that support the competitiveness of Australian industries by reducing the duty on certain imported goods, thereby encouraging their use over locally produced alternatives. The instrument was made by the Chief Executive Officer of Customs in accordance with the Act and was not subject to parliamentary review. The policy objective of this legislation is to facilitate the import of goods that are not produced in Australia, thus benefiting industries that rely on these imports by reducing their costs and potentially lowering prices for consumers. The instrument was published in the Gazette, allowing for public submissions, though none were received in response to the invitation for feedback on the tariff concession application made by Bluescope Steel.
Scope and Application
The Customs Act 1901 applies to any person or entity seeking tariff concession orders (TCOs) for goods imported into Australia. Specifically, under Part XVA of the Act, the Chief Executive Officer of Customs (CEO) has the authority to make TCOs that provide lower rates of customs duty on certain goods. The Act applies to all jurisdictions within Australia, as it is a Commonwealth Act. The CEO must ensure that the goods in question are not specified in section 269SJ, which excludes certain goods from TCO consideration. The application process requires that no substitutable goods are produced in Australia at the time the application is lodged, as outlined in sections 269C and 269D of the Act. There are no exclusions or thresholds specified in the explanatory statement, but the CEO can extend or restrict application through subordinate instruments, as permitted under the Act. The TCO itself does not disadvantage any person other than the Commonwealth and does not impose any liabilities, while beneficially affecting the rights of importers who can apply for refunds of duty on goods imported since the TCO's effective date.
Key Provisions
The primary operative sections of this legislation (section 269C, 269B, 269D, 269E, 269F, 269P, 269K, and 269S) set out the conditions under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). Specifically, section 269F allows an application to be made for a TCO in respect of goods. The CEO must then determine if the application meets the core criteria, which is detailed in section 269C. This involves ensuring that no substitutable goods were produced in Australia on the day the application was lodged, as per section 269P(3). If these criteria are met, the CEO must issue a written TCO as per section 269P(3). The TCO in question, No. 1138155, specifies that certain main drive parts are subject to a 5% duty rate but will be free of duty under the terms of the TCO.
The Act imposes several obligations on the parties involved. Firstly, it requires the CEO to make a decision on the TCO application based on the core criteria outlined in section 269C. The CEO must also publish a notice in the Gazette inviting submissions on the application as soon as practicable after accepting it as valid, as per subsection 269K(1). Additionally, the TCO must be issued if the application meets the criteria, and the CEO must ensure that no substitutable goods were produced in Australia on the application date. The legislation also ensures that the TCO does not affect the rights of persons or impose liabilities for actions taken before the TCO came into force, as stipulated in subsection 269S(1).
Breaching the provisions of the Customs Act 1901 can result in various civil or criminal consequences. For instance, making false statements in an application for a TCO could be considered fraudulent conduct, potentially leading to fines or imprisonment under section 257 of the Act. While the Explanatory Statement does not detail specific penalties for breaches related to TCOs, it is implied that such actions could be subject to the general penalties for breaches of the Customs Act. These include fines of up to $22,000 for individuals and $110,000 for corporations, as well as imprisonment for up to two years for serious offences.