EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0513660
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 Valve Blocks or Valve Manifolds on 12 October 2005.
Instrument
TCO No 0513660 was made on 3 January 2006. It declares that those certain Valve Blocks or Valve Manifolds 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. 0513660 is taken to have come into force on 12 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 Parliament of Australia, provides a framework for the administration of customs and excise duties. This legislation introduced the scheme for Tariff Concession Orders (TCOs), which allows for the reduction or exemption of customs duties on certain imported goods under specific conditions. The problem it addresses is the facilitation of trade by reducing the cost of importing specific goods, thereby encouraging their use in Australian markets and potentially stimulating local industries that might otherwise compete with imported products. The Tariff Concession Instrument No. 0513660, enacted on 3 January 2006, is an example of this scheme in action, granting a zero percent duty rate for certain Valve Blocks or Valve Manifolds, as determined by the Chief Executive Officer of Customs. The policy objective behind such instruments is to promote economic efficiency by lowering the cost of imported goods, which can lead to broader economic benefits such as increased competitiveness and consumer savings.
Scope and Application
The Customs Act 1901, under Part XVA, provides the legislative framework for Tariff Concession Orders (TCOs), which allow for reduced rates of customs duty on specified goods. This scheme applies to any person who can apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods, provided the goods do not fall under the exclusions specified in section 269SJ of the Act. The application process requires the CEO to determine if the goods are eligible by verifying that no substitutable goods are produced in Australia in the ordinary course of business, as defined in sections 269C, 269D and 269E. Once a TCO application meets the core criteria, the CEO must issue a written order declaring the goods to which a prescribed tariff item applies, as per section 269P(3). The TCO applies to the specific goods from the date the application was lodged, without retroactively affecting the rights of any person other than the Commonwealth. The TCO can be further refined through subordinate instruments, which may extend or restrict its application as needed.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0513660 under the Customs Act 1901 (section 269F) allow for the application for Tariff Concession Orders (TCOs) to be made by any person seeking to lower the customs duty on specific goods. Section 269C specifies the core criteria that the Chief Executive Officer of Customs (CEO) must consider in deciding whether an application meets the necessary conditions. Specifically, the CEO must determine if, on the day the application was submitted, no substitutable goods were produced in Australia in the ordinary course of business (section 269C). The CEO is further required to make a written order (section 269P(3)) if satisfied that the application meets the core criteria, which involves specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applicable to the goods in question.
Entities and individuals governed by this Act must ensure that any applications for TCOs are lodged in accordance with the requirements outlined in sections 269F, 269C, and 269P of the Customs Act 1901. For an application to be valid, it must be submitted to the CEO, and the applicant must demonstrate that the goods in question meet the core criteria specified in section 269C. Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested parties to lodge submissions regarding the application (subsection 269K(1)). This notice period is crucial for maintaining transparency and allowing stakeholders to voice any objections to the proposed concession.
Failure to comply with the provisions of the Customs Act 1901 or the Tariff Concession Instrument can result in significant legal consequences. The Act does not explicitly outline specific offences or penalties for breaches related to TCO applications. However, general provisions within the Customs Act 1901 and associated regulations may apply, leading to potential fines, imprisonment, or other civil and criminal penalties for non-compliance. The severity of these penalties would depend on the nature and extent of the breach, as well as any relevant statutory provisions and judicial interpretations.