EXPLANATORY STATEMENT
Tariff Concession Instrument No.0502563
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 shapemeter umbilical tubes on 23 February 2005.
Instrument
TCO No 0502563 was made on 6 May 2005. It declares that those certain shapemeter umbilical tubes 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. 0502563 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 Australian Parliament, provides a framework for the administration of customs duties and includes provisions for the creation of Tariff Concession Orders (TCOs). These orders allow for a reduction in customs duty on certain imported goods under specific conditions. The explanatory statement for Tariff Concession Instrument No. 0502563, enacted on 6 May 2005, outlines the process and rationale behind the concession granted to Bluescope Steel Limited for certain shapemeter umbilical tubes. The instrument was introduced to address the issue of ensuring competitive pricing for imported goods that are not produced domestically, thereby promoting economic efficiency and fair trade practices. The policy objective is to facilitate the import of goods that do not have domestic alternatives, thus benefiting importers and potentially consumers by reducing the cost of these goods.
Scope and Application
The Tariff Concession Instrument No. 0502563, pursuant to the Customs Act 1901, applies specifically to Bluescope Steel Limited's application for tariff concessions on certain shapemeter umbilical tubes. The instrument grants a reduced rate of customs duty for these goods, aligning with item 50 of Schedule 4 to the Customs Tariff Act 1995. The instrument's scope encompasses the goods specified in the application, ensuring that they are subject to a lower rate of customs duty—in this instance, a reduction from 5% to 3%. This concession is contingent upon the condition that no substitutable goods are produced in Australia at the time the application was lodged, as stipulated under sections 269C and 269D of the Customs Act 1901.
The instrument applies nationally across Australia, as it is an initiative under the Commonwealth's purview, and the Customs Act 1901 provides the legal framework for such concessions. The instrument does not impose any new liabilities on individuals or entities and does not affect the rights of any person as they stood on the date of the application. Importers, however, stand to benefit from this concession by potentially applying for duty refunds on goods imported since the effective date of the instrument, which coincides with the date the application was lodged.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0502563 include section 269C, which outlines the core criteria for a Tariff Concession Order (TCO) application, and section 269P, which mandates the Chief Executive Officer of Customs (CEO) to issue a written TCO if the application meets these criteria. Section 269F allows a person to apply for a TCO for goods, provided the goods do not fall under the prohibited list in section 269SJ. The definitions in sections 269D, 269E, and 269F are critical for determining whether goods are substitutable and produced in Australia in the ordinary course of business.
The Act imposes specific obligations on applicants and the CEO. An applicant must ensure their application aligns with the criteria in section 269C, specifically that no substitutable goods are produced in Australia. The CEO, upon receiving a valid application, must conduct a review to determine if the core criteria are met and subsequently publish a notice in the Gazette inviting submissions from interested parties. Following this, if the application meets the criteria, the CEO must issue a TCO, as per section 269P. This process ensures that the application and subsequent order are transparent and considered from all relevant perspectives.
Failure to comply with the requirements of the Act or the TCO can result in various consequences. While the Explanatory Statement does not specify offences or penalties, breaches of customs regulations generally attract significant penalties under the Customs Act 1901. For instance, knowingly making a false statement in a customs document can incur a penalty of up to 10,000 penalty units or imprisonment for five years, or both. Additionally, non-compliance with the TCO provisions could lead to financial liabilities, including the payment of applicable customs duties at the standard rate rather than the concessional rate.
It is essential for parties involved in the importation and application process to adhere strictly to the requirements set out in the Act and the TCO. The CEO’s role in verifying applications and issuing orders is crucial to maintaining the integrity of the tariff concession scheme. The absence of submissions in response to the Gazette notice indicates a smooth process without objections, reinforcing the legitimacy of the issued TCO.