EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0504564
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 Walking Beam Furnace Recuperator Parts on 20 April 2005.
Instrument
TCO No 0504564 was made on 2 September 2005. It declares that those certain Walking Beam Furnace Recuperator Parts 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. 0504564 is taken to have come into force on 20 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. 0504564 was enacted under the Customs Act 1901 to address the need for tariff concessions on specific imported goods, ensuring they receive preferential customs duty treatment. The instrument was introduced to facilitate the application of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, enabling a lower rate of customs duty on goods for which no substitutable goods are produced in Australia. This legislative instrument was enacted by the Australian government through the relevant provisions of the Customs Act 1901, with the policy objective of promoting economic efficiency and supporting industry by reducing import costs for certain goods. In this particular case, Bluescope Steel Ltd successfully applied for a tariff concession on Walking Beam Furnace Recuperator Parts, resulting in a reduced duty rate from 5% to 0%.
Scope and Application
The Tariff Concession Instrument No. 0504564, made under the Customs Act 1901, applies to specific goods for which an applicant, such as Bluescope Steel Ltd, has applied for and received a Tariff Concession Order (TCO) from the Chief Executive Officer of Customs. The Act and its associated instrument primarily govern the process and criteria for granting tariff concessions on certain imported goods, aiming to benefit importers by reducing or eliminating customs duties under specific conditions. The application of this Act is geographically comprehensive, as it pertains to national customs practices across Australia, overseen by the Commonwealth. It applies to any entity or individual involved in the importation of goods that meet the criteria for tariff concessions, provided the goods are not specified as excluded in section 269SJ of the Act. The TCO in question exempts certain Walking Beam Furnace Recuperator Parts from the general rate of duty, setting it at 0% instead of the usual 5%, thereby reducing the financial burden on importers of these goods. The TCO does not retroactively affect the rights or impose liabilities on any person for actions taken before its effective date, which is the date the application was lodged. The process involves public consultation as stipulated in the Act, although in this instance, no submissions were received against the TCO.
Key Provisions
The Tariff Concession Instrument No. 0504564, issued under the Customs Act 1901, pertains specifically to a Tariff Concession Order (TCO) for certain Walking Beam Furnace Recuperator Parts (section 269C). The instrument was enacted to provide a zero percent duty rate on these parts, as opposed to the general 5 percent rate (section 269P(3)). This change came into effect on 20 April 2005, the date on which the application for the concession was lodged (subsection 269S(1)).
The obligations under this Act for entities like Bluescope Steel Ltd involve meeting the core criteria as outlined in section 269C. To qualify for a TCO, the CEO must be convinced that no substitutable goods were produced in Australia on the date the application was lodged. Substitutable goods are defined in section 269D as those produced in Australia that could be used in the same manner as the goods for which the TCO is being sought. The CEO's decision is also informed by the meaning of 'ordinary course of business' as stipulated in section 269E. If the CEO determines that the application meets these criteria, they must issue a written TCO declaring the applicable duty rate (subsection 269P(3)).
Failure to adhere to the requirements or misrepresent facts in an application could result in legal consequences. Although the specific offences, penalties, or consequences are not detailed in the explanatory statement, breaches of the Customs Act 1901 generally carry substantial civil or criminal penalties, including fines and imprisonment. The severity of these penalties would depend on the nature and extent of the breach, as well as any relevant case law or subsequent legislative amendments. Importers who benefit from this TCO can apply for a refund of duties paid on goods imported since 20 April 2005, without incurring any additional liabilities (paragraph 126(1)(r) of the Regulations).