EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0512188
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 hot strip mill motor drive control converters on 13 September 2005.
Instrument
TCO No 0512188 was made on 25 November 2005. It declares that those certain hot strip mill motor drive control converters 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 free.
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. 0512188 is taken to have come into force on 13 September 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. 0512188, enacted under the Customs Act 1901, was introduced to provide tariff concessions for certain goods, thereby addressing the issue of ensuring that Australia's trade policy supports the competitive production of goods within the country. This instrument was created to facilitate the application process for Tariff Concession Orders (TCOs) which reduce the customs duty on specific goods, in cases where no substitutable goods are produced domestically. Enacted by the Chief Executive Officer of Customs, this instrument aims to meet the core criteria of TCO applications as specified in the Customs Act, ensuring that imports of the targeted goods do not disadvantage Australian producers.
The explanatory statement outlines that the instrument was enacted following an application by Bluescope Steel Ltd for a TCO concerning certain hot strip mill motor drive control converters, which are subject to a lower rate of duty under the instrument. The instrument was made on 25 November 2005, and it is effective as of the date the application was lodged, 13 September 2005. The policy objective is to support the import of these goods without imposing any liabilities or disadvantaging non-Commonwealth entities, thereby fostering a competitive trade environment.
Scope and Application
The Tariff Concession Instrument No. 0512188, made under the Customs Act 1901, applies to the specific goods identified in the instrument, namely certain hot strip mill motor drive control converters. The act allows for tariff concessions on these goods, providing a lower rate of customs duty as outlined in the instrument. This application of tariff concessions is applicable from the date the application was lodged, which is 13 September 2005. The instrument is designed to benefit importers of these goods by allowing them to apply for a refund of duty on imports made from the date the concession is effective. The application of the concession does not affect the rights of any person, other than the Commonwealth, in any way that would disadvantage them or impose liabilities for actions taken prior to the concession. The instrument does not introduce any new liabilities for any person. The scope of the legislation extends to the national level, as it is governed by Commonwealth law, and is applicable across Australia. There are no exclusions or exemptions specified in the instrument itself, though the eligibility for tariff concessions is contingent upon the core criteria outlined in the Customs Act 1901. The instrument's application may be further detailed or extended through subordinate instruments, as permitted by the overarching act.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0512188 under the Customs Act 1901 (section 269F) allow the Chief Executive Officer of Customs (CEO) to grant tariff concessions on certain goods, specifically hot strip mill motor drive control converters. If the CEO determines that an application meets the core criteria—notably, that no substitutable goods were produced in Australia on the day the application was lodged (section 269C)—they are required to issue a written order, known as a Tariff Concession Order (TCO), which declares that the specified goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). This means that the general rate of duty, which is 5%, is reduced to free for these specific goods. The TCO also specifies that it comes into force on the day the application was lodged (section 269S(1)).
The obligations imposed by the Act on parties and entities it governs include the requirement for the CEO to assess whether an application for a TCO meets the core criteria and to make a TCO if the criteria are met. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may have reasons why the TCO should not be granted (section 269K(1)). In this case, the CEO did not receive any submissions. The Act further ensures that the TCO does not affect the rights of any person, except the Commonwealth, as at the date of registration in a way that disadvantages them or imposes liabilities for actions taken before the TCO’s registration date (section 269S(1)).
The Act also outlines potential offences, penalties, and consequences for breaches. However, in this specific instance, the TCO does not impose any liabilities on any person. Importers of the affected goods may apply for a refund of duty on goods imported since the TCO is taken to have come into force under paragraph 126(1)(r) of the Regulations. The Act does not specify particular penalties for breaches in this context but generally enforces compliance through the imposition of fines or other penalties as determined by the relevant legal framework.
In conclusion, Tariff Concession Instrument No. 0512188 effectively reduces the customs duty on certain hot strip mill motor drive control converters to zero by issuing a TCO, provided the core criteria are satisfied. The obligations primarily rest on the CEO to assess applications, publish notices, and issue orders. There are no imposed liabilities or specified penalties in this context, but the rights of non-Commonwealth entities are protected from adverse effects by the TCO.