EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510201
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 walking beam furnace roller tables on 02 August 2005.
Instrument
TCO No 0510201 was made on 07 October 2005. It declares that those certain walking beam furnace roller tables 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. 0510201 is taken to have come into force on 02 August 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. 0510201 was enacted under the Customs Act 1901, aiming to address the need for tariff concessions on specific imported goods. The instrument was introduced to provide relief on customs duties for certain goods, in this case, walking beam furnace roller tables, by Bluescope Steel Limited. The primary objective of this legislation, as outlined in the explanatory statement, is to facilitate tariff reductions for goods where no substitutable Australian-made alternatives exist, thereby supporting industries that rely on imported components for their operations. This measure was enacted by the Chief Executive Officer of Customs, following a valid application and after satisfying the core criteria set out in the Customs Act 1901. The policy objective is to encourage trade efficiency and support manufacturing sectors by reducing the cost of imported materials.
Scope and Application
The Customs Act 1901, through Part XVA, enables the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) to provide lower rates of customs duty on certain goods, subject to specific criteria. This applies to any individual or entity that imports goods and seeks to benefit from reduced duty rates under a TCO. The legislation extends across the Commonwealth of Australia and is not limited to a particular state, territory, or industry, although its practical application will vary depending on the nature of the goods and the business of the importer. Notably, the Act excludes certain goods from eligibility for a TCO as specified in section 269SJ, and an application must satisfy the core criteria outlined in sections 269C, 269B, and 269D to be approved. Once a TCO is granted, it provides relief from the general duty rate, as demonstrated in TCO No. 0510201 for certain walking beam furnace roller tables, reducing the duty from 5% to free. The application process requires public consultation, and in this instance, no submissions were received against the application. The TCO’s effect is prospective, meaning it does not retroactively disadvantage any person or impose liabilities for actions taken before its registration.
Key Provisions
The Tariff Concession Instrument No. 0510201, made under the Customs Act 1901, outlines the process and conditions for granting Tariff Concession Orders (TCOs) to certain goods. Specifically, section 269F (2) of the Act allows for the application of a TCO to goods, which results in a lower rate of customs duty. Bluescope Steel Limited applied for such a concession on 02 August 2005 for certain walking beam furnace roller tables. The CEO of Customs was satisfied that no substitutable goods were produced in Australia at the time of the application, thus meeting the core criteria set out in section 269C. Consequently, the CEO issued the TCO on 07 October 2005, declaring that the goods in question were subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with the duty rate being free instead of the general 5% rate.
The obligations under this Act for the CEO of Customs include ensuring that any TCO application is not for goods specified in section 269SJ, which are ineligible for tariff concessions. Once an application is deemed valid, the CEO must publish a notice in the Gazette, inviting submissions from any interested parties who may have reasons against the concession, as outlined in section 269K(1). In this instance, no submissions were received. The TCO is considered to have come into force on the date the application was lodged, which was 02 August 2005, in accordance with section 269S(1).
Failure to comply with the provisions of the Customs Act 1901 or the terms of a TCO can lead to various legal consequences. Offences under the Act can result in penalties as prescribed by law. For instance, section 269V of the Act allows for a penalty of up to 5,500 penalty units for wilful or negligent contraventions. These penalties are substantial and are designed to ensure adherence to the regulations governing tariff concessions. Additionally, any person found to be in breach of the terms of the TCO may face civil or criminal consequences, which could include fines or imprisonment, depending on the severity of the breach. The Act clearly stipulates that the TCO does not affect the rights of any person other than the Commonwealth, nor does it impose any liabilities on any person in respect of actions taken prior to the registration of the TCO.