EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510728
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 Hydraulic Pumps on 16 August 2005.
Instrument
TCO No 0510728 was made on 28 October 2005. It declares that those certain Walking Beam Furnace Hydraulic Pumps 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. 0510728 is taken to have come into force on 16 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. 0510728, enacted in 2005, is a legislative instrument under the Customs Act 1901. This Act facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which provide a reduced rate of customs duty on specified goods. The Tariff Concession Instrument No. 0510728 was introduced to address the need for tariff concessions on certain imported goods, specifically the Walking Beam Furnace Hydraulic Pumps applied for by Bluescope Steel, ensuring these goods are subject to a zero rate of duty as no substitutable goods are produced in Australia. The instrument was created following a valid application by Bluescope Steel and the satisfaction of the core criteria set out in the Customs Act 1901, particularly the absence of substitutable goods in Australia. The instrument aims to benefit importers by potentially allowing them to apply for a refund of duty on goods imported since the TCO came into force on 16 August 2005, without imposing any new liabilities on individuals or entities.
Scope and Application
The Tariff Concession Instrument No. 0510728 under the Customs Act 1901 applies to specific goods, namely certain Walking Beam Furnace Hydraulic Pumps, and is relevant to entities involved in the importation of these goods. The Act facilitates the application of a lower rate of customs duty on these goods through the creation of a Tariff Concession Order (TCO) by the Chief Executive Officer of Customs, provided certain criteria are met. The primary scope of this legislation is to address the importation of goods for which no substitutable goods are produced in Australia, thereby ensuring that the TCO application aligns with the core criteria stipulated in the Act. The geographic reach of this Act is national, as it operates within the framework of the Commonwealth's customs legislation. It is pertinent to note that the TCO does not disadvantage any person, including the Commonwealth, by affecting their rights as at the date of registration for anything done or omitted before the registration date. Additionally, importers stand to benefit from the ability to apply for a refund of duty on goods imported since the effective date of the TCO. This Act does not impose any liabilities on any person.
Key Provisions
The main operative sections of this legislation, specifically TCO No 0510728, establish the framework for tariff concession orders (TCOs) under the Customs Act 1901 (section 269F). The key requirement here is for the Chief Executive Officer (CEO) of Customs to decide whether an application for a TCO meets the core criteria (section 269C), which mandates that no substitutable goods were produced in Australia on the day the application was lodged (section 269D). If these criteria are satisfied, the CEO must issue a written TCO (section 269P(3)). This particular TCO, made on 28 October 2005, applies to certain Walking Beam Furnace Hydraulic Pumps, effectively reducing the duty rate from 5% to 0% (Schedule 4, item 50).
The obligations imposed by this Act on the parties involved, primarily the CEO and the applicant, include ensuring that the application for a TCO is valid and meets the statutory criteria (section 269K(1)). The CEO must also publish a notice in the Gazette inviting submissions from any interested parties who might have reasons why the TCO should not proceed (subsection 269K(1)). Additionally, the applicant must provide sufficient evidence that no substitutable goods are produced in Australia at the time of application. Failure to comply with these obligations could result in the application being rejected.
Breaches of the requirements set forth in the Customs Act 1901 can lead to various consequences. While the specific Act does not detail penalties, breaches of the Customs Act generally can result in civil or criminal penalties. Civil penalties may include fines up to a significant amount, often determined by the severity and frequency of the breach. Criminal penalties can include imprisonment, with the specific duration depending on the nature of the offence. The Act also provides for the possibility of seizure and forfeiture of goods involved in the breach.
The TCO itself does not affect the rights of any person, except the Commonwealth, as of the registration date, ensuring no disadvantage or liabilities are imposed retroactively (subsection 269S(1)). Importers, however, stand to benefit from the reduced duty rates, and they can apply for duty refunds on goods imported since the TCO's effective date (Regulation 126(1)(r)). This ensures that any financial benefits arising from the TCO are passed on to the importers.