EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0504570
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 recuperator butterfly valves on 21 April 2005.
Instrument
TCO No 0504570 was made on 2 September 2005. It declares that those certain recuperator butterfly valves 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 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. 0504570 is taken to have come into force on 21 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. 0504570 was enacted in 2005 under the Customs Act 1901 to address the need for tariff concessions for specific goods imported into Australia. This legislative instrument was developed in response to an application by Bluescope Steel Limited for a Tariff Concession Order (TCO) for certain recuperator butterfly valves, aiming to provide relief from customs duty for goods that are not produced domestically. The Tariff Concession Orders scheme, outlined in Part XVA of the Customs Act 1901, allows the Chief Executive Officer of Customs to make orders that provide lower rates of customs duty on goods specified in the application, provided the goods are not substitutable and are not prohibited by section 269SJ of the Act. The policy objective is to support importers by reducing the duty payable on specific imported goods, thus facilitating trade and potentially lowering costs for businesses. The TCO in question came into effect on the date the application was lodged, 21 April 2005, and provides a free rate of duty for the specified valves, which otherwise attract a general rate of 5%.
Scope and Application
The Customs Act 1901, under Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) through which the Chief Executive Officer (CEO) of Customs can grant tariff concessions on specified goods. This legislative instrument applies to any person or entity that submits an application for a TCO for goods not specified in section 269SJ of the Act, which excludes certain goods from being subject to a TCO. The application process requires that the goods in question are not substitutable by goods produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets the core criteria set out in sections 269C, 269D, and 269E, a written order is issued as a TCO, applying a lower rate of customs duty to the specified goods. This Act has a Commonwealth jurisdictional reach, and its application can be extended or restricted through subordinate instruments. The Explanatory Statement details a specific TCO (No. 0504570) for certain recuperator butterfly valves, which was made effective from 21 April 2005, providing a duty-free rate for these goods, and does not disadvantage any existing rights or impose new liabilities on persons other than the Commonwealth.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0504570, made under the Customs Act 1901, are detailed in sections 269C, 269F, 269P, and 269S. Section 269F (1) allows for an application to be made to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of specified goods. If the CEO is satisfied that the application meets the core criteria, as outlined in section 269C, a TCO can be issued, effectively reducing the customs duty rate on those goods. Section 269P(3) stipulates that the CEO must make a written order declaring the goods to which the TCO applies, specifying the applicable item in Schedule 4 to the Customs Tariff Act 1995. The CEO is also required, under section 269K(1), to publish a notice in the Gazette inviting submissions from interested parties, although in this case, no submissions were received. Section 269S(1) indicates that the TCO is effective from the date the application was lodged, which in this instance was 21 April 2005.
The obligations imposed by the Act on the parties involved are primarily on the CEO of Customs. The CEO must assess whether the application for a TCO meets the core criteria, which includes determining if there are any substitutable goods produced in Australia that could replace the goods for which the TCO is being sought. This involves verifying that no goods that could serve the same purpose are being produced domestically. Additionally, the CEO is required to publish a notice in the Gazette to invite any submissions regarding the application. This transparency measure ensures that all stakeholders have an opportunity to voice their opinions or objections before a TCO is issued. The CEO must then consider these submissions and decide whether to proceed with the TCO.
The legislation outlines specific consequences for breaches or non-compliance with the terms of a TCO. While the explanatory statement does not detail specific offences or penalties, breaches of the Customs Act 1901 or the Customs Tariff Act 1995 generally may lead to various civil and criminal penalties. Under the Customs Act, penalties for non-compliance can include fines and imprisonment. The exact penalties depend on the severity of the breach and can vary widely. For instance, section 268 of the Customs Act provides for penalties such as fines up to 10,000 penalty units or imprisonment for up to five years for serious offences. It is also important to note that the TCO does not impose any liabilities on any person, safeguarding them from any disadvantage or additional burdens arising from its implementation.
Overall, Tariff Concession Instrument No. 0504570 facilitates tariff reductions for specific goods by ensuring that the CEO of Customs follows a structured process for evaluating and approving TCO applications. The process includes considering the core criteria, publishing notices for stakeholder submissions, and ensuring that the rights of all parties, particularly importers, are protected. The legislation is designed to encourage fair and transparent trade practices while providing economic benefits through reduced customs duties on specified goods.