EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510589
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 applied for a TCO in respect of certain Walking Beam Furnace Parts on 11 August 2005.
Instrument
TCO No 0510589 was made on 28 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. 0510589 is taken to have come into force on 11 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 Customs Act 1901, enacted by the Commonwealth Parliament, establishes the legislative framework for the administration of customs duties in Australia. It provides for the imposition of customs duties on imported goods, as well as various exceptions and concessions. The Act was introduced to address the need for a structured and consistent system for managing customs duties, facilitating trade while also protecting domestic industries. Specifically, Part XVA of the Act outlines the process for making Tariff Concession Orders (TCOs), which are designed to provide duty concessions on certain goods under specified conditions. The policy objective behind the introduction of TCOs is to support Australian industries by reducing the cost of imported goods that have no domestic substitutes, thereby encouraging local production and consumption.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the application for Tariff Concession Orders (TCOs) which can reduce the customs duty on specific goods. This process applies to any individual or entity that submits an application to the Chief Executive Officer of Customs, provided that the goods in question do not fall under the exclusions listed in section 269SJ. The Act mandates that for a TCO to be granted, no substitutable goods, meaning those produced in Australia for similar uses, should be available at the time of application. Once the CEO determines that an application meets these criteria, a TCO is issued, effectively applying a lower duty rate to the specified goods, as seen in TCO No. 0510589 for Walking Beam Furnace Parts, reducing the duty from 5% to 0%. This concession is effective from the date the application is lodged and does not retroactively affect any pre-existing rights or liabilities of non-Commonwealth entities, while allowing importers to seek refunds for duties paid on goods imported since the TCO's effective date.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0510589, under the Customs Act 1901, revolve around the creation and implementation of Tariff Concession Orders (TCOs). Section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the application does not pertain to goods specified in section 269SJ, which are ineligible for TCOs, the CEO must determine if the application meets the core criteria (section 269C). If satisfied, the CEO must issue a written order (section 269P(3)). In this specific instance, TCO No. 0510589 was made on 28 October 2005, declaring that certain Walking Beam Furnace Parts are subject to a 0% duty rate, as outlined in item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations and requirements on the parties involved. Firstly, the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (subsection 269K(1)). In the case of TCO No. 0510589, no submissions were received. Additionally, the CEO must ensure that the application meets the core criteria, which includes verifying that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). These obligations ensure transparency and fairness in the process of granting tariff concessions.
Any breach of the provisions in the Customs Act 1901 can lead to various consequences. While specific offences, penalties, or civil/criminal consequences are not detailed in the explanatory statement for this particular TCO, it is important to note that the Act provides for penalties in other contexts. For instance, contraventions of the Customs Act can result in fines and, in some cases, imprisonment. The penalties can vary depending on the nature and severity of the breach, with maximum penalties outlined in the Act for different types of offences. The specific penalties for breaches related to TCOs would need to be referred to within the broader scope of the Customs Act and associated regulations.