EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0513531
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 Limited applied for a TCO in respect of certain compressor or turbine spindle valves on 6 October 2005.
Instrument
TCO No 0513531 was made on 23 December 2005. It declares that those certain compressor or turbine spindle valves 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.0513531 is taken to have come into force on 6 October 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, provides a framework for the administration of customs duties and the regulation of imports and exports. One of the mechanisms within this framework is the Tariff Concession Order (TCO), which allows for the reduction or elimination of customs duties on certain goods under specific conditions. This is particularly relevant under Part XVA of the Act, which was introduced to address the need for flexible tariff arrangements that can respond to unique economic circumstances or the particular needs of certain industries. The policy objective behind this legislative instrument is to facilitate trade by providing tariff relief to importers who can demonstrate that no suitable Australian-made alternatives are available for the goods they wish to import, thus promoting efficiency and competitiveness in the market.
Tariff Concession Instrument No. 0513531 exemplifies this policy in practice. Issued on 23 December 2005, this instrument provides a tariff concession for certain compressor or turbine spindle valves, which are subject to a duty rate of 5% under the general tariff schedule. The concession makes these goods duty-free, provided no substitutable goods are produced in Australia. This measure aims to benefit importers by reducing their costs, thereby potentially lowering the prices of goods for consumers and supporting industries that rely on such components. The process of granting the concession involved an application from Bluescope Steel Limited, which was reviewed and approved by the Chief Executive Officer of Customs, in accordance with the provisions of the Customs Act 1901.
Scope and Application
The Tariff Concession Instrument No. 0513531 under the Customs Act 1901 applies to individuals or entities seeking tariff concessions for certain goods imported into Australia. Specifically, this instrument pertains to Bluescope Steel Limited’s application for tariff concession orders (TCO) regarding certain compressor or turbine spindle valves. The instrument outlines that these goods will now attract a free rate of duty as opposed to the general rate of 5%. The Act applies to the Chief Executive Officer of Customs who has the authority to make these TCOs if the application meets the criteria set out in the Act, such as the absence of substitutable goods produced in Australia. The geographic reach of this legislation is national, applying across all states and territories within Australia. Exclusions include goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The instrument may be extended or restricted through subordinate instruments, but this particular TCO No. 0513531 became effective on the date the application was lodged, 6 October 2005, and does not impose any liabilities on individuals or entities other than the Commonwealth.
Key Provisions
The Customs Act 1901, particularly Part XVA, establishes a framework for Tariff Concession Orders (TCOs), which are issued by the Chief Executive Officer (CEO) of Customs (section 269F). These orders apply lower rates of customs duty to certain goods. An applicant can seek a TCO if the goods are not specified in section 269SJ, which lists goods ineligible for a TCO. The CEO must assess whether the application meets the core criteria, specifically if no substitutable goods are produced in Australia in the ordinary course of business (section 269C). The definition of 'substitutable goods' in section 269D refers to Australian-made goods that can serve the same purpose or design as the goods in question. If the CEO determines that the application meets these criteria, they must issue a written TCO (section 269P(3)).
The obligations imposed by the Customs Act on parties governed by the TCO include ensuring compliance with the core criteria before applying for a TCO. The applicant must demonstrate that no substitutable goods are produced in Australia. Additionally, the CEO is obligated to publish a notice in the Gazette inviting submissions from interested parties if they believe the TCO should not proceed (subsection 269K(1)). The TCO must be issued if the CEO is satisfied that the application meets the core criteria and no objections are raised. The rights of importers are positively affected as they can apply for a refund of duties on goods imported since the effective date of the TCO (subsection 269S(1)). Importantly, the TCO does not disadvantage any person or impose liabilities for actions taken before the registration date.
In terms of consequences for breach, the Customs Act does not explicitly state specific offences or penalties for non-compliance with TCO provisions. However, general provisions within the Customs Act may apply, including potential fines or imprisonment for fraudulent activities or breaches related to customs duties. The maximum penalties for such offences can vary depending on the nature and severity of the breach, as outlined in other sections of the Customs Act. For instance, penalties for providing false or misleading information can result in fines up to $22,000 for individuals and significantly higher for corporations. Additionally, serious breaches may lead to criminal charges, with more severe penalties for repeated or egregious violations.