EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0509610
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 Extractors on 20 July 2005.
Instrument
TCO No 0509610 was made on 30 September 2005. It declares that those certain Walking Beam Furnace Extractors 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. 0509610 is taken to have come into force on 20 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 Customs Act 1901, enacted by the Australian Parliament, establishes a framework within which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. The Act aims to provide relief from customs duties for goods that meet specific criteria, thereby facilitating trade and economic growth. Specifically, the Act addresses the need to reduce customs duty burdens on goods where no suitable Australian-produced alternatives exist. Instrument No. 0509610, made under the authority of the Customs Act, provides a concession for certain Walking Beam Furnace Extractors, reducing their duty from 5% to 0%. This instrument came into effect on 20 July 2005, the date the application was lodged, and does not disadvantage any existing rights or impose new liabilities on individuals or entities other than the Commonwealth. The policy objective of this measure is to encourage the importation of goods that are not domestically produced, thereby benefiting importers by potentially allowing them to claim refunds on duties paid prior to the TCO's effective date.
Scope and Application
The Tariff Concession Instrument No. 0509610, issued under the Customs Act 1901, applies to the specific goods identified in the application by Bluescope Steel Ltd, namely certain Walking Beam Furnace Extractors. The Act allows the Chief Executive Officer of Customs to grant tariff concessions to reduce the customs duty on these goods. This instrument extends to the entire Commonwealth of Australia and impacts the entities involved in the import and production of these particular goods. It operates by lowering the duty from the general rate of 5% to 0% as specified in the TCO, provided that no substitutable goods are produced in Australia. The instrument ensures that no pre-existing rights or liabilities of individuals or entities, other than the Commonwealth, are adversely affected by the concession. The concession does not apply to goods specified in section 269SJ of the Act, which are ineligible for such reductions. The CEO’s decision to issue the TCO was made after considering the application against the core criteria outlined in the Customs Act 1901, with no objections received during the consultation period.
Key Provisions
The Customs Act 1901, through its Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Section 269F of the Act allows an individual to apply to the CEO for a TCO in respect of goods, provided that these goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. For an application to be considered, it must meet the core criteria outlined in section 269C, which requires that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Definitions of key terms such as "goods produced in Australia", "ordinary course of business", and "substitutable goods" are provided in sections 269D, 269E, and 269P(3) respectively.
Upon satisfying the core criteria, the CEO is required under section 269P(3) to issue a written TCO, specifying that the goods in question are subject to a particular item in Schedule 4 of the Customs Tariff Act 1995. This instrument results in a concessional rate of customs duty being applied to the specified goods. For instance, in the case of Walking Beam Furnace Extractors, the general rate of duty is 5%, but the rate for goods subject to a TCO is reduced to 0%.
The Act imposes certain obligations on the CEO. Under section 269K(1), the CEO must, as soon as practicable after accepting an application as valid, publish a notice in the Gazette inviting any interested party to lodge a submission if they believe there are reasons why the TCO should not be made. In the case of TCO No. 0509610, no submissions were received in response to this notice. Furthermore, under section 269S(1), the TCO is deemed to come into force on the day the application was lodged. This means that TCO No. 0509610 is effective from 20 July 2005.
The Act also outlines the consequences for any breach of its provisions. Although the Explanatory Statement does not detail specific offences or penalties, under the general legal framework, breaches of customs regulations can lead to civil or criminal penalties. Civil penalties may include fines, while criminal penalties can result in imprisonment, reflecting the seriousness with which breaches of customs legislation are treated. The exact penalties depend on the nature and severity of the breach, but they are intended to ensure compliance with the Act’s requirements.