EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0508589
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 Charger Parts on 1 July 2005.
Instrument
TCO No 0508589 was made on 16 September 2005. It declares that those certain Walking Beam Furnace Charger 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. 0508589 is taken to have come into force on 1 July 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. 0508589, made in 2005 under the Customs Act 1901, aims to facilitate tariff concessions for specific goods by reducing the customs duty on them. This instrument was enacted by the Australian Government to address the need for lowering import duties on certain products where Australian-made substitutes do not exist, thereby encouraging fair trade practices and potentially boosting the competitiveness of Australian businesses. The Customs Act 1901, administered by the Parliament of Australia, establishes the framework for these tariff concessions, with the primary objective of ensuring that the concessions do not disadvantage existing rights and liabilities of any party other than the Commonwealth. Bluescope Steel Ltd's application for a tariff concession on Walking Beam Furnace Charger Parts exemplifies this process, resulting in a zero per cent duty rate on these goods, down from the standard five per cent.
Scope and Application
The Tariff Concession Instrument No. 0508589 under the Customs Act 1901 applies to entities or individuals seeking tariff concessions for specified goods, in this case, Bluescope Steel Ltd's application for certain Walking Beam Furnace Charger Parts. The application of this Act is limited to the Commonwealth jurisdiction and it does not extend to state or territory levels. The Act allows for the reduction of customs duty rates on goods not produced in Australia and for which there are no substitutable goods available domestically, as per the criteria set out in section 269C of the Act. The scope of the Act is further defined by exclusions listed in section 269SJ, which outlines the goods that cannot be subject to a tariff concession order. The application process involves the Chief Executive Officer of Customs determining whether the application meets the core criteria, which includes verifying that no substitutable goods are produced in Australia in the ordinary course of business. The instrument itself came into effect on the date the application was lodged, which in this instance was 1 July 2005. The Act also mandates that any person who considers there are reasons why the tariff concession should not be granted must lodge a submission with the CEO, although in this instance, no such submissions were received. The tariff concession does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on persons in relation to actions taken prior to the registration of the concession.
Key Provisions
The main operative sections of the Customs Act 1901 as it pertains to Tariff Concession Orders (TCOs) include sections 269C, 269P, 269K, and 269SJ (section 269C). These sections establish the criteria that must be met for a TCO application to be valid, such as ensuring that no substitutable goods are produced in Australia on the day the application is lodged. If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they must make a written order declaring that the goods in question are subject to a prescribed rate of customs duty, which could potentially be a lower rate or zero duty (section 269P). Additionally, section 269K requires the CEO to publish a notice in the Gazette inviting submissions from any interested parties regarding the validity of the TCO application. In this instance, no submissions were received in response to the invitation (section 269K).
The Act imposes several obligations on the parties involved, primarily on the CEO of Customs. The CEO must carefully assess each application to determine if it meets the core criteria for a TCO. This involves verifying that no substitutable goods are being produced in Australia on the day the application is lodged (section 269C). Upon making a decision, the CEO must publish a notice in the Gazette and invite any interested parties to submit their views on whether the TCO should be granted (section 269K). Furthermore, the Act stipulates that the TCO does not disadvantage any person or impose liabilities on any person except the Commonwealth in respect of actions taken before the TCO's registration (section 269S).
There are no specific offences or penalties outlined in the Act for breaches related to TCOs. However, the Act does provide for the imposition of duties and penalties in general terms. For example, if any goods are imported in contravention of the Customs Act, the importer may be liable for penalties, including fines and imprisonment. The specific penalties would depend on the nature and extent of the breach, as well as any additional regulations or guidelines that may apply. In the context of this TCO, while there are no penalties for the failure to meet the core criteria, any improper importation of goods that should be subject to a higher duty rate could result in significant fines and potential criminal charges.
In summary, the key provisions of the Customs Act 1901 concerning TCOs require that applications meet specific criteria, mandate the CEO to publish notices and consider submissions, and ensure that TCOs do not impose liabilities on non-Commonwealth entities. While the Act does not detail specific penalties for breaches related to TCOs, it does provide a framework for imposing penalties for broader breaches of customs regulations, which may include fines and imprisonment depending on the severity of the offence.