EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0515320
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 Goggle and/or Isolating Valves on 2 November 2005.
Instrument
TCO No 0515320 was made on 16 January 2006. It declares that those certain Goggle and/or Isolating 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 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. 0515320 is taken to have come into force on 2 November 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. 0515320, enacted under the Customs Act 1901, addresses the need for tariff concessions on specific goods to support Australian industry and economic growth. The instrument was introduced to facilitate tariff concessions on certain Goggle and/or Isolating Valves, reducing the customs duty rate from 5% to 0%. This was enacted by the Chief Executive Officer of Customs following an application by Bluescope Steel Ltd on 2 November 2005, and the instrument came into force on the same day. The objective of the instrument is to ensure that no substitutable goods were produced in Australia at the time of application, thereby allowing for the concession without disadvantaging domestic producers or imposing new liabilities on importers. The process involved publishing a notice in the Gazette to invite submissions, none of which were received, thus allowing the tariff concession to proceed as intended.
Scope and Application
The Tariff Concession Instrument No. 0515320 under the Customs Act 1901 applies to any entity that imports Goggle and/or Isolating Valves into Australia and seeks a reduction in the applicable customs duty rate. The Act extends to the entire Commonwealth of Australia and applies to the importation of specific goods as defined in the Instrument. The application of the Tariff Concession Order (TCO) is contingent upon the Chief Executive Officer of Customs determining that no substitutable goods are produced in Australia, thereby meeting the core criteria outlined in the Act. Notably, the TCO does not disadvantage any person, other than the Commonwealth, and does not impose liabilities on any person for actions taken prior to the TCO’s effective date. The TCO, once effective, allows for a zero percent duty rate on the specified valves, which contrasts with the general rate of 5% for such goods, thereby benefiting importers who may apply for a refund of duties paid on imports since the TCO's effective date.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0515320 are section 269C, 269B, 269D, 269E, and 269P(3) of the Customs Act 1901. Section 269C specifies that a Tariff Concession Order (TCO) application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Sections 269B, 269D, and 269E define the meanings of "goods produced in Australia", "ordinary course of business", and "substitutable goods". Section 269P(3) mandates that if the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria, the CEO must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The Customs Act 1901 imposes several obligations and requirements on the parties involved. Firstly, it requires any person seeking a TCO to apply to the CEO, as per section 269F. The CEO is obligated to assess the application against the core criteria, specifically ensuring that the goods are not those listed in section 269SJ, which are ineligible for a TCO. Once the CEO determines that the application meets the core criteria, section 269P(3) mandates that the CEO make a written order (the TCO). Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting submissions from any person who considers the TCO should not be made, as per subsection 269K(1).
There are no specific offences, penalties, or civil/criminal consequences outlined for breach of the Tariff Concession Instrument No. 0515320. However, the Customs Act 1901 and related regulations govern the broader compliance framework. For instance, under the Customs Act, non-compliance with customs duties or other customs-related obligations can result in civil penalties, criminal charges, or both. The maximum penalties for offences under the Customs Act can include fines and imprisonment, depending on the severity and intent behind the breach. Importers can also apply for a refund of duty on goods imported since the TCO came into force, under paragraph 126(1)(r) of the Regulations, without any liabilities imposed on them.
The Tariff Concession Instrument No. 0515320 primarily aims to reduce the customs duty on certain Goggle and/or Isolating Valves from 5% to 0%, provided that no substitutable goods were produced in Australia. The legislation ensures that the rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO came into force. The CEO's role is crucial in assessing applications and publishing notices to invite submissions, ensuring a transparent and fair process. While the specific penalties for breaching this instrument are not detailed, the overarching compliance framework under the Customs Act 1901 ensures that any breaches are subject to appropriate legal consequences.