EXPLANATORY STATEMENT
Tariff Concession Instrument No.0501479
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 Limited applied for a TCO in respect of certain mixed gas shut-off valve actuators on 7 February 2005.
Instrument
TCO No 0501479 was made on 22 April 2005. It declares that those certain mixed gas shut-off valve actuators 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. 0501479 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 Commonwealth Parliament, establishes a framework for tariff concessions that can be applied to specific goods, reducing their customs duty rates. This Act was introduced to address the need for a mechanism to provide relief on customs duties for certain goods, particularly where there are no locally produced alternatives. The Customs Act 1901 allows for the application of Tariff Concession Orders (TCOs) by interested parties, subject to approval by the Chief Executive Officer of Customs, who must ensure that the application meets core criteria such as the absence of substitutable goods produced in Australia. This legislative provision aims to facilitate trade and protect local industries by ensuring that tariff relief is granted only when appropriate, balancing the interests of importers and domestic producers.
Scope and Application
The Customs Act 1901, as amended and supplemented by the Tariff Concession Instrument No. 0501479, applies to any entity seeking a Tariff Concession Order (TCO) for goods imported into Australia. Specifically, this Act facilitates the application process for concessional rates of customs duty, enabling the Chief Executive Officer of Customs to consider and approve applications provided they meet the stipulated core criteria. This includes ensuring that no substitutable goods are produced in Australia at the time of the application, as defined by the Act. The application and subsequent TCO, if approved, directly affect the duty rates applicable to the specified goods, altering their import costs from the date the application was lodged. The Act's application is national in scope, impacting all importers within Australia, and extends to any goods that qualify under the Act’s provisions, barring those explicitly excluded in section 269SJ. This legislation does not disadvantage existing rights of non-Commonwealth entities and imposes no additional liabilities, ensuring a smooth transition and benefit for importers of the affected goods.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0501479, under the Customs Act 1901, focus on the establishment and implementation of Tariff Concession Orders (TCOs). Specifically, section 269F allows for applications to the Chief Executive Officer of Customs (CEO) for a TCO in respect of certain goods. This is contingent upon the CEO being satisfied that the application pertains to goods not specified in section 269SJ, which excludes certain goods from TCO eligibility. Section 269C outlines the core criteria that must be met for a TCO application to be considered, particularly ensuring that no substitutable goods are produced in Australia on the day the application was lodged. Section 269P(3) mandates the CEO to issue a written order, a TCO, if the application meets these criteria.
The Act imposes several obligations and requirements on the parties involved. The CEO must review and assess each TCO application against the core criteria specified in sections 269C and 269SJ. This includes determining whether substitutable goods are produced in Australia, as defined by sections 269D and 269E. Additionally, under section 269K(1), the CEO is required to publish a notice in the Gazette once an application is accepted as valid, inviting any interested parties to lodge submissions regarding the application. The CEO must also consider any submissions received in their decision-making process.
For breaches of the provisions outlined in the Customs Act 1901, there are specific offences, penalties, and consequences that apply. While the explanatory statement does not explicitly detail the penalties for breaching TCO regulations, it is understood that the Act provides for both civil and criminal penalties for non-compliance. Civil penalties may include fines and other monetary penalties, while criminal penalties could involve imprisonment, reflecting the seriousness of contravening customs laws. The maximum penalties would be determined based on the specific breach and the relevant sections of the Customs Act and associated regulations.
The Tariff Concession Instrument No. 0501479, effective from 7 February 2005, ensures that the rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the date the TCO came into force. Importantly, the TCO does not impose any liabilities on any person other than the Commonwealth, safeguarding the interests of other stakeholders. The TCO also ensures that no person’s rights are adversely affected by its implementation, maintaining a fair and balanced approach to tariff concessions.