EXPLANATORY STATEMENT
Tariff Concession Instrument No.0502546
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 steel strip rolling mill pinions on 23 February 2005.
Instrument
TCO No 0502546 was made on 6 May 2005. It declares that those certain steel strip rolling mill pinions 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 10%. 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. 0502546 is taken to have come into force on 23 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 Parliament of Australia, provides a framework for the administration of customs and excise duties in Australia. It was introduced to address the need for a streamlined and efficient process for managing customs duties on imported goods. Part XVA of the Act establishes a scheme for Tariff Concession Orders (TCOs), allowing the Chief Executive Officer of Customs to grant tariff concessions on certain goods if specific criteria are met. This mechanism aims to support Australian industries by reducing the duty on imported goods where no domestic alternatives exist, thereby promoting fair competition and potentially lowering costs for businesses and consumers. The Explanatory Statement for Tariff Concession Instrument No. 0502546 outlines the process by which Bluescope Steel Limited successfully applied for a tariff concession on certain steel strip rolling mill pinions, resulting in a reduced duty rate from 10% to 3%. This reduction is intended to benefit importers who can now apply for a refund of duty on these goods imported since the concession took effect on 23 February 2005.
Scope and Application
The Customs Act 1901 provides a framework through which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs. These orders apply to specific goods, granting them a lower rate of customs duty compared to the general rate. The Act allows any person to apply to the CEO for a TCO, provided that the goods in question are not those specified in section 269SJ of the Act, which cannot be subject to a TCO. The CEO must assess whether the application meets the core criteria, primarily that no substitutable goods were produced in Australia in the ordinary course of business at the time of the application. The Act specifies the definitions of "goods produced in Australia," "ordinary course of business," and "substitutable goods." If the CEO determines that the application meets these criteria, they must issue a written TCO, applying a prescribed item of Schedule 4 to the Customs Tariff Act 1995. The TCO applies nationally across Australia and does not disadvantage any person other than the Commonwealth by affecting rights as they stood before the TCO was issued. The TCO allows for refunds of duties on the affected goods imported since the date the TCO is taken to have come into force.
Key Provisions
The main operative sections of this legislation are sections 269C, 269B, 269D, 269E, 269F, 269P(3), and 269SJ of the Customs Act 1901, which together establish the framework for Tariff Concession Orders (TCOs) and their application. Specifically, section 269F outlines the process for applying for a TCO, while section 269C sets out the core criteria that must be satisfied for an application to be approved. Section 269P(3) stipulates that if these criteria are met, the CEO must issue a written order, or TCO, which specifies the reduced duty rate applicable to the goods in question. Section 269SJ details the types of goods that cannot be subject to a TCO. In this instance, TCO No. 0502546 was issued by the CEO for certain steel strip rolling mill pinions, applying a reduced duty rate of 3% instead of the general rate of 10%.
Under the Customs Act 1901, the CEO has specific obligations when handling a TCO application. Firstly, the CEO must determine whether the application is for goods that fall outside the prohibited list in section 269SJ. If the goods are not on this list, the CEO must then assess whether the application meets the core criteria in section 269C. This involves confirming that no substitutable goods were produced in Australia at the time the application was lodged. If these criteria are satisfied, the CEO is required to issue a TCO, as per section 269P(3). Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections to the TCO, as outlined in section 269K(1). In the case of TCO No. 0502546, the CEO did not receive any objections.
Failure to comply with the provisions of the Customs Act 1901 and the associated regulations could result in significant consequences. While the explanatory statement does not detail specific offences or penalties, breaches of customs legislation generally can lead to civil or criminal penalties. For example, section 130 of the Customs Act 1901 provides for fines and imprisonment for individuals or entities found guilty of offences such as fraudulent importation, under-declaring the value of goods, or evading duty. The penalties can vary depending on the severity of the offence, with maximum fines and imprisonment terms stipulated in the Act. Furthermore, any failure to adhere to the terms of a TCO could result in the invalidation of the concession, potentially leading to the imposition of the standard duty rates on the affected goods.
In summary, the Tariff Concession Instrument No. 0502546, made under the Customs Act 1901, provides a lower rate of customs duty on certain steel strip rolling mill pinions, contingent on specific criteria being met. The CEO's role in approving and issuing TCOs is crucial, and any failure to follow the prescribed procedures could have legal ramifications. While the exact penalties for breaches are not detailed in the explanatory statement, the potential consequences include fines, imprisonment, and the loss of tariff concessions.