EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0411195
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 Ltd applied for a TCO in respect of certain epoxy resins on 28 October 2004.
Instrument
TCO No 0411195 was made on 4 January 2005. It declares that those certain epoxy resins 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 3%.
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.0411195 is taken to have come into force on 28 October 2004.
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, provides a framework for the administration of customs duties, including provisions for Tariff Concession Orders (TCOs). The primary issue the Customs Act 1901 addresses is the facilitation of trade by allowing the application for lower rates of customs duty on certain goods, provided they meet specific criteria. Instrument No. 0411195, made under the authority of the Customs Act 1901, aims to grant a tariff concession to Bluescope Steel Ltd for certain epoxy resins, recognising that no substitutable goods were produced in Australia at the time of application. The policy objective of this instrument is to support Australian businesses by reducing the cost of importing specific goods, thereby enhancing competitiveness without imposing additional liabilities on individuals or entities.
Scope and Application
The Customs Act 1901, under Part XVA, enables the Chief Executive Officer (CEO) of Customs to issue Tariff Concession Orders (TCOs) that lower the customs duty on certain goods. The legislation applies to individuals or entities seeking to import goods into Australia, specifically those who apply for a TCO and meet the criteria outlined in sections 269C and 269SJ. The Act ensures that a TCO can only be issued if the goods in question are not produced in Australia in the ordinary course of business and are not specified as ineligible under section 269SJ. The instrument’s application is national in scope, as it operates under the Commonwealth’s customs jurisdiction. The Explanatory Statement for TCO No. 0411195 details an application by Bluescope Steel Ltd for certain epoxy resins, which was approved and published, resulting in a reduced customs duty rate from 5% to 3%. The TCO came into effect on 28 October 2004, the date of the application, and does not retroactively affect any transactions or impose liabilities on importers for actions taken prior to its registration.
Key Provisions
The main operative sections of the Customs Act 1901 as it pertains to Tariff Concession Orders (TCOs) are found in sections 269C, 269F, and 269P. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided the goods are not specified in section 269SJ. The CEO must then determine if the application meets the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the application meets these criteria, the CEO is obligated under section 269P(3) to make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, thereby applying a lower rate of customs duty.
The Act imposes several obligations on the parties involved. The applicant must ensure that their application for a TCO complies with all requirements, particularly the core criteria outlined in section 269C. The CEO has the duty to assess the validity of the application and determine if the core criteria are met. Once satisfied, the CEO must make a written order that declares the goods subject to the TCO. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting any person who believes the TCO should not be made to submit their reasons to the CEO. This process ensures transparency and allows for public scrutiny of the TCO application.
Breach of the obligations imposed by the Act may lead to various consequences. While the explanatory statement does not explicitly list offences, failure to adhere to the stipulated processes for applying for and granting a TCO could result in the application being rejected. There are no stated penalties for breaches of the Act in this context, but non-compliance could lead to the goods being subject to the standard customs duty rates rather than the reduced rate. The TCO itself does not impose any liabilities on any person other than the Commonwealth, and it does not affect the rights of a person as at the date of registration.
The explanatory statement does not specify maximum penalties for breaches of the Act but implies that the primary consequence of failing to meet the core criteria is the application being denied and the goods being subject to the general rate of duty. For instance, if Bluescope Steel Ltd had failed to meet the core criteria for their TCO application, the epoxy resins would have been subject to the 5% duty rate rather than the reduced 3% rate. The Act's focus appears to be more on the procedural correctness of the TCO process rather than punitive measures for non-compliance.