EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0413841
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 skid buttons on 17 December 2004.
Instrument
TCO No 0413841 was made on 21 February 2005. It declares that those certain skid buttons 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. 0413841 is taken to have come into force on 17 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, enacted by the Commonwealth Parliament, provides a framework for the regulation of customs and excise, including the establishment of tariff concession orders (TCOs) to facilitate trade by applying lower rates of customs duty to certain goods. The Tariff Concession Instrument No. 0413841, introduced in 2005, addresses the need for tariff concessions by enabling the Chief Executive Officer of Customs to grant concessions based on specific criteria, such as the absence of substitutable goods produced in Australia. This instrument, which came into force on the date of the application, 17 December 2004, benefits importers by reducing the duty rate on specified skid buttons from 5% to 3%, while ensuring that no existing rights or liabilities are adversely affected by the concession. The process includes a requirement for public consultation, although in this instance, no submissions were received.
Scope and Application
The Tariff Concession Instrument No. 0413841, made under the Customs Act 1901, applies to specific goods, namely certain skid buttons, which are subject to a lower rate of customs duty as a result of a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs. This concession applies to Bluescope Steel Ltd and is effective from the date the application for the TCO was lodged, 17 December 2004. The Act allows for the creation of TCOs to reduce customs duty on goods not produced in Australia, ensuring these goods are not unfairly burdened by tariff rates. The instrument does not affect any rights or liabilities of persons other than the Commonwealth and specifically benefits importers who can apply for a refund of duty on the affected goods imported since the TCO's effective date. This instrument is limited in scope to the particular goods specified in the TCO and does not extend to other goods or industries unless specifically addressed by subsequent instruments.
Key Provisions
The primary operative sections of the Customs Act 1901, particularly section 269F, allow an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) concerning goods. If the CEO determines that the application is not for goods that are specified in section 269SJ, which lists goods that cannot be subject to a TCO, the CEO must assess whether the application meets the core criteria (section 269C). This involves verifying that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269P(3)). If the application meets these criteria, the CEO must make a written TCO order, declaring that the goods specified in the application are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)).
The obligations and requirements imposed by the Act on the parties involved are primarily procedural. The CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested parties to lodge submissions if they believe the TCO should not be made (subsection 269K(1)). In the case of TCO No 0413841, no submissions were received in response to this invitation. The TCO itself comes into force on the day the application for the TCO was lodged (subsection 269S(1)). This TCO does not affect the rights of any person other than the Commonwealth as at the date of registration in a way that disadvantages them or imposes liabilities for actions or omissions before the registration date.
Under the Customs Act 1901, breaches of the TCO or failure to comply with the requirements set out within it can result in legal consequences. The Act does not specify particular offences or penalties for breach of a TCO, but general provisions in the Customs Act and related legislation may apply. These could include fines or imprisonment for fraudulent activities or failure to comply with customs regulations. The specific penalties would depend on the nature and severity of the breach, and would be determined according to the broader legislative framework governing customs and trade practices in Australia.