EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510590
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 Sinter Cooler Fan Parts on 11 August 2005.
Instrument
TCO No 0510590 was made on 28 October 2005. It declares that those certain Sinter Cooler Fan 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. 0510590 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 Australian Parliament, is designed to regulate the importation and exportation of goods across the nation's borders. To address the need for tariff concessions on certain goods, Part XVA of the Customs Act 1901 allows for the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation aims to provide relief by reducing customs duty rates on specific goods, provided they meet the core criteria outlined in the Act. One such instance is Tariff Concession Instrument No. 0510590, which was introduced on 28 October 2005, in response to an application from Bluescope Steel for certain Sinter Cooler Fan Parts. The policy objective of this legislation is to ensure that importers of qualifying goods are not disadvantaged and can potentially benefit from reduced duty rates, thereby enhancing trade efficiency and competitiveness.
Scope and Application
The Customs Act 1901, specifically through its Tariff Concession Orders (TCO) scheme, applies to entities or individuals seeking reduced customs duty rates for certain goods, provided these goods meet the specified criteria and are not excluded under section 269SJ of the Act. This scheme operates nationally across Australia, and the application for a TCO is processed by the Chief Executive Officer of Customs (CEO) who must determine whether the application meets the core criteria outlined in section 269C of the Act. Notably, a TCO can only be granted if it is established that no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act. Once a TCO is registered, it applies retroactively to the date of application lodging, with no retroactive disadvantages to persons other than the Commonwealth, and no new liabilities are imposed on any individual or entity. This legislative framework is designed to ensure that the benefits of tariff concessions are available to importers, subject to the strict conditions outlined in the Act and its subordinate instruments.
Key Provisions
The key provisions of the Tariff Concession Instrument No. 0510590 under the Customs Act 1901 (section 269F) allow for the application to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). The CEO must decide whether the application meets the core criteria, primarily if no substitutable goods were produced in Australia in the ordinary course of business (section 269C). Once a TCO is granted, it applies to goods specified in the order, and in this case, the goods are certain Sinter Cooler Fan Parts (section 269P(3)). The TCO specifies that these goods are subject to a 0% duty rate instead of the general 5% duty (Schedule 4, item 50, Customs Tariff Act 1995).
The obligations imposed by the Act on the parties involved require the CEO to publish a notice in the Gazette, inviting any interested parties to submit objections to the TCO if they believe it should not be made (subsection 269K(1)). The CEO is also responsible for ensuring that the application meets the core criteria for a TCO, primarily that no substitutable goods are produced in Australia (section 269C). Bluescope Steel, as the applicant, must provide all necessary information and evidence to support their application to the CEO.
If a party fails to comply with the requirements set out in the Customs Act 1901, they may face civil or criminal penalties. The specific penalties depend on the nature and severity of the breach. In general, non-compliance with the customs regulations can result in fines, imprisonment, or both, as determined by the relevant courts. The maximum penalties for serious breaches can be substantial, reflecting the importance of adhering to the customs laws and regulations. However, the Explanatory Statement does not provide specific details on the penalties for breaches in this particular context.