EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0413471
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 ceramic welding powders on 10 December 2004.
Instrument
TCO No 0413471 was made on 21 February 2005. It declares that those certain ceramic welding powders 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. 0413471 is taken to have come into force on 10 December 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 was enacted to establish a comprehensive framework for customs regulation in Australia, addressing the need for streamlined and efficient customs processes. One of the critical components of this Act is Part XVA, which allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply lower rates of customs duty on specified goods. This legislative instrument was designed to support Australian industries by reducing the cost of imported goods, thereby fostering economic growth and competitiveness. The policy objective underpinning this mechanism is to provide tariff relief to importers of specific goods, where no domestic alternatives are produced, thereby ensuring that Australian businesses are not unfairly disadvantaged in the global market.
Tariff Concession Instrument No. 0413471, issued in 2005, exemplifies this legislative intent by reducing the duty on certain ceramic welding powders from the general rate of 5% to 3%. This specific instrument was introduced after Bluescope Steel Ltd applied for the concession, and no objections were received following the required public consultation. The TCO is effective from the date the application was lodged, 10 December 2004, and benefits importers by potentially allowing them to claim refunds on duties paid before the concession was applied. Importantly, this instrument does not impose any new liabilities or disadvantage existing rights holders, ensuring a balanced approach to tariff regulation.
Scope and Application
The Customs Act 1901, specifically Part XVA, enables the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that apply lower rates of customs duty to specified goods. These orders can be applied for by any person, provided the goods in question are not among those that cannot be subject to a TCO as specified in section 269SJ. For a TCO application to be considered, it must meet 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 CEO is satisfied that the application meets these criteria, they must make a written order declaring the goods subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. The TCO applies nationally and affects the rights of importers beneficially, allowing them to apply for a refund of duty on goods imported since the TCO's effective date, which is the day the application was lodged. Importantly, the TCO does not disadvantage any person or impose liabilities for actions taken before its registration. The CEO is also required to publish a notice in the Gazette inviting submissions from any interested parties; however, no submissions were received in response to the notice for this particular TCO.
Key Provisions
The main operative sections of the Tariff Concession Order (TCO) No. 0413471 include sections 269C, 269P, and 269SJ of the Customs Act 1901 (the Act). Section 269C outlines the core criteria for a TCO application, which must be satisfied to reduce the rate of customs duty on certain goods. Specifically, it states that the application will meet the core criteria if, on the day it was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P requires the Chief Executive Officer of Customs (the CEO) to make a written order (the TCO) if satisfied that the application meets the core criteria. Section 269SJ lists goods that cannot be the subject of a TCO. The TCO No. 0413471 specifically declares that certain ceramic welding powders are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, reducing the rate of duty from the general 5% to 3%.
The Act imposes several obligations on the parties involved in the TCO process. Firstly, the CEO must ensure that any TCO application is assessed against the core criteria stipulated in section 269C of the Act. The CEO must also determine if the goods in question are substitutable and produced in Australia in the ordinary course of business. Additionally, the CEO is required to publish a notice in the Gazette under subsection 269K(1) of the Act, inviting submissions from interested parties if any believe the TCO should not be made. In this case, no submissions were received in response to the published notice. The TCO is deemed to come into force on the day the application was lodged, as per subsection 269S(1) of the Act.
Breaching the requirements of the Customs Act 1901, particularly in relation to the process of applying for and implementing a TCO, can result in civil or criminal consequences. Although the explanatory statement does not detail specific offences, general provisions of the Customs Act may apply. For example, section 141 of the Act outlines penalties for incorrect declarations or fraudulent behaviour, which could include fines or imprisonment depending on the severity of the breach. The maximum penalties for contraventions under the Act can vary widely but generally include substantial fines and potential imprisonment for serious offences. The specifics of penalties would be governed by the broader provisions of the Customs Act and the particulars of the breach in question.