EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510436
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 Parts on 8 August 2005.
Instrument
TCO No 0510436 was made on 21 October 2005. It declares that those certain Walking Beam Furnace 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. 0510436 is taken to have come into force on 8 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. 0510436, enacted under the Customs Act 1901, was introduced to address the need for tariff concessions that could reduce the customs duty on certain imported goods. This instrument allows the Chief Executive Officer of Customs to grant lower duty rates on specified goods, provided that no substitutable goods are produced in Australia. The policy objective of this legislation is to ensure that the Australian industry is not unfairly disadvantaged by the importation of similar goods, while also promoting the efficiency and competitiveness of Australian businesses by reducing the cost of imported goods where no domestic alternative exists. The instrument came into force on the same day the application was lodged, in this case on 8 August 2005, and no submissions were received in opposition to the tariff concession, indicating broad acceptance of the measure.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0510436, applies to entities or individuals seeking tariff concessions for specific imported goods, with a particular focus on the application by Bluescope Steel Ltd for Walking Beam Furnace Parts. This instrument, issued under the authority of the Chief Executive Officer of Customs, allows for the reduction of customs duty on these specific goods to zero percent, provided that no substitutable goods are produced in Australia and the application meets the core criteria outlined in the Act. The application process involves a submission by the entity to the CEO, followed by a Gazette notice inviting submissions from other interested parties, none of which were received in this instance. The TCO applies from the date the application was lodged and does not retroactively affect the rights of any party other than the Commonwealth, nor does it impose any new liabilities on non-Commonwealth entities or individuals.
Geographically, this Act operates at the national level, with the CEO's decision impacting customs duties across Australia. The instrument ensures that the rights of importers are protected and potentially benefit from duty refunds for imports made since the TCO's effective date. Notably, the Act allows for further specification and application of the TCO through subordinate instruments, although this particular TCO does not introduce new exclusions, exemptions, or thresholds beyond those already established in the primary legislation.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0510436 (TCIO 2005/436) under the Customs Act 1901 (section 269C) establish that a Tariff Concession Order (TCO) may be issued by the Chief Executive Officer of Customs (CEO) if certain conditions are met. Specifically, section 269C of the Act mandates that the application for a TCO meets the core criteria if, on the day the application is lodged, no substitutable goods were produced in Australia in the ordinary course of business. Additionally, section 269F allows any person to apply for a TCO in respect of goods, provided they are not specified in section 269SJ, which lists goods that cannot be subject to a TCO.
The obligations imposed by the Act on parties involve ensuring compliance with the criteria set out in section 269C. For example, Bluescope Steel Ltd, the applicant in this case, needed to demonstrate that no substitutable goods were produced in Australia at the time of application. Upon meeting these criteria, the CEO is required to make a written order (section 269P(3)) declaring that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995. The CEO must also publish a notice in the Gazette (section 269K(1)) inviting submissions from any interested parties, although in this case, no submissions were received.
In terms of consequences for breach, the Customs Act 1901 does not specify particular offences or penalties for failing to comply with the TCO provisions. However, non-compliance with customs regulations generally can lead to civil or criminal penalties. For instance, knowingly making a false statement or representation can result in a civil penalty of up to $22,200 or criminal penalties, including fines of up to $275,000 for individuals and $1,375,000 for corporations, or imprisonment for up to five years, or both. It is also important to note that 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 in respect of anything done or omitted to be done before the date of registration.