EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0504554
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 gear boxes and couplings on 19 April 2005.
Instrument
TCO No 0504554 was made on 2 September 2005. It declares that those certain gear boxes and couplings 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 free.
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. 0504554 is taken to have come into force on 19 April 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 Tariff Concession Instrument No. 0504554 was enacted under the Customs Act 1901, with the objective of providing tariff concessions for certain gear boxes and couplings manufactured by Bluescope Steel Ltd. This legislation was introduced to address a specific economic gap by reducing the customs duty on these goods to zero, thus facilitating their import and potentially boosting local manufacturing capabilities. The instrument was made by the Chief Executive Officer of Customs, following an application by Bluescope Steel Ltd on 19 April 2005, and it was formally declared on 2 September 2005. The policy objective of this instrument aligns with broader economic strategies to support Australian manufacturing by reducing costs associated with importing certain industrial components.
Scope and Application
The Tariff Concession Instrument No. 0504554, made under the Customs Act 1901, applies to the specific goods, namely certain gear boxes and couplings, that are the subject of an application by Bluescope Steel Ltd. The Act facilitates tariff concessions for goods not produced in Australia in the ordinary course of business, thereby providing a lower rate of customs duty as specified in the instrument. The geographic reach of this legislation is national, as it is administered by the Commonwealth through the Chief Executive Officer of Customs. The application of this concession is limited to the goods specified in the instrument and does not affect the rights of any person as at the date of registration. Any person considering that there are reasons why the tariff concession should not be made may lodge a submission, although in this case, no submissions were received. The instrument does not impose any liabilities on any person and benefits importers who may apply for a refund of duty on goods imported since the day the tariff concession is taken to have come into force.
Key Provisions
The Tariff Concession Instrument No. 0504554, made under section 269F of the Customs Act 1901, concerns Tariff Concession Orders (TCOs) that the Chief Executive Officer of Customs (CEO) may issue to provide lower rates of customs duty on specified goods (s. 269F(1)). The CEO must make a written order if satisfied that an application meets the core criteria, such as there being no substitutable goods produced in Australia at the time of application (s. 269C). Instrument No. 0504554 was made on 2 September 2005, declaring that certain gear boxes and couplings are subject to a TCO, thereby setting their duty rate to free instead of the general rate of 10% (s. 269P(3)). This TCO came into force on the date the application was lodged, 19 April 2005 (s. 269S(1)).
The obligations imposed by the Customs Act 1901 on the parties involved are primarily centred around the process of applying for and issuing TCOs. The CEO must ensure that applications are assessed against the core criteria, which include the absence of substitutable goods produced in Australia in the ordinary course of business (s. 269C). Once an application is deemed valid, the CEO must publish a notice in the Gazette inviting submissions from interested parties and consider any responses before making a decision (s. 269K(1)). In this case, the CEO did not receive any submissions opposing the TCO for the specified gear boxes and couplings.
In terms of potential breaches and consequences, the Customs Act 1901 does not explicitly detail specific offences or penalties for failing to comply with the TCO provisions. However, general provisions in the Act and related regulations could apply to any improper conduct related to the application or misuse of TCOs. The Act and associated regulations might impose fines or other penalties for non-compliance with customs duties and related regulations, though the specifics would depend on the nature and extent of the breach. The TCO itself does not impose any liabilities on any person and does not affect the rights of individuals or entities other than the Commonwealth concerning actions taken before the TCO's effective date (s. 269S(1)).