EXPLANATORY STATEMENT
Tariff Concession Instrument No.0501478
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 butterfly valves on 7 February 2005.
Instrument
TCO No0501478 was made on 18 April 2005. It declares that those certain butterfly valves 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 No0501478 is taken to have come into force on 7 February 2005.
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, introduced a scheme for Tariff Concession Orders (TCOs) under Part XVA to provide relief from customs duties on certain imported goods. This legislative framework was established to address the problem of ensuring that Australian industries are not unduly disadvantaged by high tariffs on goods that are not produced domestically, thereby promoting competitive markets and supporting economic growth. The explanatory statement outlines Tariff Concession Instrument No.0501478, which was enacted on 18 April 2005. This instrument was a response to an application by Bluescope Steel Ltd for a TCO concerning specific butterfly valves, reducing their customs duty from the general rate of 5% to 3%. The instrument was effective from 7 February 2005, the date the application was lodged, and no submissions opposing the TCO were received. The policy objective, as stated in the explanatory statement, is to allow for tariff concessions where no substitutable goods are produced in Australia, thus benefiting importers by potentially reducing their duty costs.
Scope and Application
The Tariff Concession Instrument No. 0501478 under the Customs Act 1901 applies to the specific case of certain butterfly valves for which Bluescope Steel Ltd applied for a Tariff Concession Order (TCO). This Act allows for reduced customs duty rates for goods specified in a TCO, provided certain criteria are met. In this instance, the Chief Executive Officer of Customs (CEO) assessed that the application met the core criteria, specifically that no substitutable goods were produced in Australia, thereby reducing the duty from 5% to 3%. The instrument is effective from the date the application was lodged, which is 7 February 2005, and does not adversely affect any existing rights or impose new liabilities on persons other than the Commonwealth. The scope of this legislation is limited to the particular goods in question, and the TCO does not extend to other types of goods or industries unless similarly applied for and approved by the CEO.
Key Provisions
The main operative sections of this legislation focus on the process for making Tariff Concession Orders (TCOs) under the Customs Act 1901 (section 269F). An applicant, such as Bluescope Steel Ltd, can apply to the Chief Executive Officer of Customs (CEO) for a TCO to reduce the customs duty on specific goods. To qualify, the application must meet core criteria, notably that no substitutable goods are produced in Australia (section 269C). If the CEO is satisfied that these criteria are met, they must issue a written order declaring that the goods in question are subject to a lower rate of customs duty specified in the Customs Tariff Act 1995 (section 269P(3)). For example, in TCO No0501478, certain butterfly valves are subject to a reduced duty rate of 3% instead of the general rate of 5%.
The Act imposes certain obligations on both the applicant and the CEO. The applicant must submit a valid application to the CEO, ensuring it complies with the criteria set out in the Act. The CEO, upon receiving an application, has the duty to assess whether it meets the core criteria and to make a decision accordingly (section 269K(1)). This includes publishing a notice in the Gazette inviting any person who believes the TCO should not be made to submit their reasons. In this case, no submissions were received. The CEO must also ensure that the TCO comes into force on the day the application is lodged (subsection 269S(1)).
Failure to comply with the requirements set out in the Customs Act 1901 can result in various consequences. While the explanatory statement does not specify particular offences or penalties for breach of the TCO provisions, general penalties for breaches of the Customs Act can include fines and imprisonment. The precise penalties depend on the nature and severity of the breach, as outlined in the Customs Act 1901 and related regulations. The Act aims to ensure that the TCO does not adversely affect the rights of any person other than the Commonwealth, nor impose any liabilities on individuals in respect of actions taken before the TCO’s effective date.