EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0515324
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 Butt Splicers and/or Unwinders on 2 November 2005.
Instrument
TCO No 0515324 was made on 16 January 2006. It declares that those certain Butt Splicers and/or Unwinders 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. 0515324 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 Customs Act 1901, enacted by the Parliament of Australia, provides a framework for the administration of customs duties and the regulation of goods entering and leaving the country. In particular, Part XVA of the Act establishes a scheme under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO) to grant tariff concessions on specific goods. The policy objective of this scheme is to support Australian industries by reducing the duty on imported goods where no substitutable products are produced domestically. Tariff Concession Instrument No. 0515324, made on 16 January 2006, was introduced to address a specific application by Bluescope Steel Ltd for a tariff concession on certain Butt Splicers and/or Unwinders. The instrument was made after the CEO determined that no substitutable goods were produced in Australia, thus meeting the core criteria set out in the Act. As a result, the instrument declares that these goods are subject to a 0% duty rate, down from the general rate of 5%. The instrument does not disadvantage any person or impose liabilities on anyone in relation to actions taken before its registration.
Scope and Application
The Customs Act 1901, under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer (CEO) of Customs, which apply lower rates of customs duty to specific goods. This provision is intended to benefit industries by reducing the duty on certain goods, provided that no substitutable goods are produced in Australia. An entity such as Bluescope Steel Ltd can apply for a TCO if, on the day the application is lodged, there are no goods produced in Australia that can replace the goods in question. If the CEO determines that the application meets the core criteria, a TCO is issued, as seen in TCO No. 0515324 for certain Butt Splicers and/or Unwinders, reducing the duty rate from 5% to 0%. The geographic reach of this legislation is national, impacting all importers within Australia. The Act does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person, except for the Commonwealth, for actions taken before the TCO is registered.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0515324, pursuant to the Customs Act 1901, involve the application, assessment, and implementation of a Tariff Concession Order (TCO) by the Chief Executive Officer (CEO) of Customs. Section 269F allows for an application to be made by a person for a TCO regarding specified goods. The CEO must then determine whether the application meets the core criteria outlined in section 269C, which includes verifying that no substitutable goods are produced in Australia on the day the application was lodged (section 269P(3)). If these criteria are met, the CEO must issue a TCO, as per section 269P(3), specifying the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies.
The obligations imposed on the parties under this Act are primarily on the CEO of Customs. The CEO must first accept the TCO application and ensure it complies with the statutory requirements. This includes publishing a notice in the Gazette (subsection 269K(1)) inviting any interested parties to submit objections if they believe the TCO should not be granted. Once the CEO is satisfied that the application meets the core criteria, they must issue a TCO as outlined in section 269P(3). The CEO must also ensure that the TCO does not disadvantage any person other than the Commonwealth or impose any liabilities on them in respect of actions taken before the TCO’s effective date.
There are no explicit offences or penalties outlined in the explanatory statement for breaches of the TCO or the Customs Act 1901 related to this specific instrument. However, it is understood that failure to comply with the conditions set out in the TCO could potentially lead to legal consequences, such as the imposition of duties on the goods or other regulatory actions. While the explanatory statement does not specify maximum penalties, it is likely that breaches of the Customs Act 1901 generally could incur significant fines or other penalties as determined by the relevant courts. The TCO itself aims to benefit importers by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO, thus ensuring that the rights of importers are not adversely affected.