EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1138156
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 1138156 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. 1138156 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 Australian Parliament, establishes a framework for the administration of customs and excise duties. It includes provisions for Tariff Concession Orders (TCOs) under Part XVA, which allow for reduced customs duty rates on certain imported goods. Enacted to address the problem of ensuring that Australian industries can remain competitive without being unduly burdened by high customs duties on specific imported goods, this legislative instrument aims to facilitate smoother trade and support domestic industries by providing tariff relief where appropriate. The policy objective of this Act, as seen in the creation of TCOs, is to mitigate the impact of customs duties on particular goods, thereby supporting their availability and affordability within the Australian market.
The explanatory statement for Tariff Concession Instrument No. 1138156, issued under this Act, details the process by which Bluescope Steel successfully applied for a TCO concerning certain main drive parts, leading to a reduction in the duty rate from 5% to free. This legislative action was taken after the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia at the time of the application, thereby meeting the core criteria set out in the Act. The instrument came into force on the date of the application, 15 November 2011, and importers of these goods can apply for a refund of duty paid since that date, while no new liabilities are imposed on any person.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides the framework for the creation of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs. This legislation applies to individuals and entities who seek to import certain goods into Australia, provided that these goods meet the criteria outlined in the Act. A TCO may be applied for by any person, and if the CEO is satisfied that the application complies with the core criteria, a TCO may be granted. The geographic reach of the Act is national, impacting importers across Australia. The Act applies to the import of goods for which a TCO has been applied and approved, and it does not apply to goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The Act allows for the extension of its application through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the rates of duty applicable to various goods.
Key Provisions
The main operative sections of the Customs Act 1901, as applied in Tariff Concession Instrument No. 1138156, establish a framework for Tariff Concession Orders (TCOs) (sections 269C, 269F, 269S, 269P). A TCO is a written order made by the Chief Executive Officer of Customs (CEO) that applies a lower rate of customs duty to specified goods if certain criteria are met. Specifically, section 269C states that a TCO application meets the core criteria if no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. The CEO must then make a written order declaring that the goods the subject of the TCO application are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, with the rate of duty specified in the order.
The obligations imposed by the Act on parties governed by it include the requirement for an applicant, such as Bluescope Steel, to submit an application to the CEO for a TCO. The CEO must then assess the application against the core criteria set out in section 269C. If satisfied, the CEO must make a written TCO order as specified in section 269P(3). Additionally, the CEO is obligated to publish a notice in the Gazette inviting submissions from any person who considers that there are reasons why the TCO should not be made, as per section 269K(1). These obligations ensure that the process for granting tariff concessions is transparent and allows for any potential objections to be considered.
In terms of consequences for non-compliance or breach, the Act does not specify particular offences, penalties, or consequences within the text of the TCO itself. However, the general legal framework under which the Customs Act operates would apply. This may include civil or criminal penalties for fraudulent applications, misrepresentations, or other breaches of customs laws. The maximum penalties for such breaches could vary widely depending on the specific nature of the offence and are not detailed within the text of this particular TCO. Importers, however, benefit from the ability to apply for a refund of duty on goods imported since the TCO is taken to have come into force under paragraph 126(1)(r) of the Regulations, without incurring any liabilities.