EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510591
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 0510591 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. 0510591 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 Tariff Concession Instrument No. 0510591 was enacted in 2005 as part of the Customs Act 1901, designed to address the gap in tariff concessions for specific goods by allowing the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs). This legislative instrument aims to provide relief by reducing or eliminating customs duty on certain goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. The instrument was introduced by the CEO following an application by Bluescope Steel for a TCO on certain Walking Beam Furnace Parts, resulting in a zero percent duty rate for these goods, down from the general rate of five percent. The instrument ensures that no existing rights are adversely affected and allows importers to apply for duty refunds on eligible goods imported since the effective date of the TCO.
Scope and Application
The Tariff Concession Instrument No. 0510591 under the Customs Act 1901 applies to entities and persons involved in the importation of specific goods, namely Walking Beam Furnace Parts, which are now subject to a reduced rate of customs duty as declared by the Chief Executive Officer of Customs. This concession is available to those who import the specified parts, provided they meet the criteria outlined in section 269C of the Act, which includes the absence of substitutable goods being produced in Australia at the time of the application. The geographic scope of this Act is national, as it pertains to customs regulations that apply across Australia. Any entity or individual importing the designated parts into Australia can benefit from the zero percent duty rate, provided they comply with the conditions stipulated in the Act and the accompanying Customs Tariff Act 1995. Notably, the Act does not provide for any exclusions or exemptions beyond those specified in section 269SJ, which lists goods that are ineligible for tariff concessions. The application of this Act can be extended or modified through subordinate instruments, allowing for adjustments to the types of goods eligible for concessions or changes in the duty rates.
Key Provisions
The Tariff Concession Instrument No. 0510591 (the Instrument) under the Customs Act 1901 (the Act) is a legislative measure designed to provide tariff concessions on certain goods. According to section 269F of the Act, an entity such as Bluescope Steel can apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). The CEO must then assess whether the application meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If these criteria are satisfied, the CEO is mandated to make a TCO as per section 269P(3), declaring that the specified goods are subject to a prescribed rate of duty. In this case, the Instrument declares that certain Walking Beam Furnace Parts are subject to a 0% duty rate, down from the general rate of 5%.
The Act imposes several obligations on the CEO and the applicants for a TCO. Once an application is received, the CEO must publish a notice in the Gazette (subsection 269K(1)) inviting submissions from any interested parties. In this instance, no submissions were received, but the obligation to publish remains. Additionally, the CEO must ensure that the application complies with the conditions outlined in section 269SJ, which specifies goods that cannot be subject to a TCO. Upon determining that the application meets the core criteria, the CEO must make a written TCO.
Failure to comply with the requirements of the Act or the Instrument can result in various consequences. While the explanatory statement does not detail specific offences, breaches of the Act can generally lead to penalties. Under the Customs Act, penalties for non-compliance can include fines and, in some cases, imprisonment. The severity of the penalty often depends on the nature and extent of the breach, but it is essential for applicants and the CEO to adhere strictly to the legislative requirements to avoid any legal repercussions.
The commencement of the TCO, as per subsection 269S(1) of the Act, is effective from the date the application was lodged, which in this case is 11 August 2005. The rights of persons, excluding the Commonwealth, are not adversely affected by the TCO as of the registration date, ensuring that no one is unfairly disadvantaged or imposed with liabilities for actions prior to the TCO's effective date. Importers of the specified goods will benefit from this TCO by being eligible to apply for a refund of duty on goods imported since the TCO's effective date. Importantly, the TCO does not impose any new liabilities on any person, further safeguarding the interests of all involved parties.