EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0503390
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 compressor piston rods on 24 March 2005.
Instrument
TCO No 0503390 was made on 3 June 2005. It declares that those certain compressor piston rods 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 0%.
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. 0503390 is taken to have come into force on 24 March 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, was designed to regulate the importation and exportation of goods into and out of Australia. Among its provisions, Part XVA specifically addresses the scheme for Tariff Concession Orders (TCOs), which allows for the application of a lower rate of customs duty on certain goods. Enacted to address the gap in providing tariff relief for imported goods where no Australian-made substitutes exist, the Act allows the Chief Executive Officer of Customs to assess applications for TCOs based on core criteria, such as the absence of substitutable goods produced in Australia. The policy objective of this legislation is to facilitate trade by reducing customs duties on goods for which there are no local alternatives, thereby encouraging the importation of these goods and potentially stimulating domestic demand for related products.
Scope and Application
The Tariff Concession Instrument No. 0503390, made under the Customs Act 1901, applies to specific goods identified in an application for a Tariff Concession Order (TCO), such as the compressor piston rods applied for by Bluescope Steel Ltd. The Act facilitates the reduction of customs duty for goods not produced in Australia and for which no substitutable goods are produced domestically. The instrument was made by the Chief Executive Officer of Customs on 3 June 2005, following an application lodged on 24 March 2005, and it applies from that date. This instrument is part of a national scheme that allows for the granting of tariff concessions to importers, thereby potentially reducing the financial burden on businesses importing these specific goods. The application process involves an assessment by the CEO to ensure the goods meet the criteria for concession, including the absence of substitutable goods being produced in Australia. The instrument does not disadvantage any person other than the Commonwealth and does not impose any liabilities on individuals or entities for actions taken prior to its registration.
Key Provisions
The main operative sections of the Customs Act 1901, as referenced in the Tariff Concession Instrument No. 0503390, establish a framework for the creation of Tariff Concession Orders (TCOs). Under section 269F, individuals or entities can apply to the Chief Executive Officer of Customs (CEO) for a TCO regarding certain goods. If the CEO is convinced that the application does not pertain to goods that are ineligible under section 269SJ, the CEO then evaluates whether the application meets the core criteria as stipulated in section 269C. This evaluation is based on whether, on the date of application, there are no substitutable goods being produced in Australia in the ordinary course of business.
The obligations imposed by the Act on the parties involved primarily revolve around the process of applying for and receiving a TCO. For applicants, this means ensuring that their application is valid and meets the criteria set out in the Act. The CEO, on the other hand, has the responsibility to review applications, consult with relevant parties, and publish notices inviting submissions if necessary. Furthermore, the CEO must make a written order if the application satisfies the core criteria, as outlined in section 269P(3).
Any breaches of the Act or non-compliance with the provisions of the TCO can lead to various consequences. While the specific offences and penalties are not detailed in the provided text, the Act generally allows for civil and criminal penalties for breaches. These may include fines and, in more severe cases, imprisonment. The maximum penalties, however, would depend on the specific nature and severity of the breach. It is crucial for applicants and the CEO to adhere to the guidelines and processes established in the Act to avoid any potential legal repercussions.