EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0515681
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 hot blast valve parts on 08 November 2005.
Instrument
TCO No 0515681 was made on 23 January 2006. It declares that those certain hot blast valve parts 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.0515681 is taken to have come into force on 08 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. 0515681, enacted under the Customs Act 1901, aims to address the need for tariff concessions for specific goods that are not produced in Australia and for which there are no substitutable goods produced domestically. This instrument was introduced to facilitate the application process for tariff concessions, ensuring that the Chief Executive Officer of Customs can efficiently review and grant concessions where appropriate. The instrument was developed by the relevant legislature to streamline the process for businesses seeking tariff reductions, thereby promoting economic efficiency and competitiveness for imported goods that cannot be produced locally. The policy objective of this instrument is to provide a clear and effective mechanism for businesses to apply for tariff concessions, ensuring that the application process is transparent and responsive to the needs of the importing industry.
Scope and Application
The Customs Act 1901, through Part XVA, allows the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCOs) that apply lower rates of customs duty to certain goods. This process is available to any person who meets the core criteria, particularly where the goods in question are not substitutable by products manufactured in Australia. The application must not pertain to goods specifically excluded under section 269SJ of the Act. The CEO's decision to issue a TCO is contingent on the absence of substitutable goods produced in Australia as per the definitions in sections 269D and 269E. The geographic scope of this legislation is national, given its basis under the Commonwealth Customs Act. There are no exclusions explicitly stated in the explanatory statement beyond those specified in section 269SJ. The application of the Act may be extended or refined through subordinate instruments, though such measures are not detailed in this particular explanatory statement.
Key Provisions
The Tariff Concession Instrument No. 0515681, under the Customs Act 1901, outlines specific provisions for tariff concessions on certain hot blast valve parts, as detailed in section 269F (2). This section allows an individual to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) for goods. Once an application is deemed valid, as per section 269C, the CEO is obligated to determine whether the application meets the core criteria. These criteria are assessed to ensure that no substitutable goods are produced in Australia on the day the application was lodged, which is defined in section 269D and 269E. If the CEO finds that the application meets these criteria, they are mandated to issue a written TCO, as per section 269P(3), specifying that the goods in question are subject to a prescribed tariff item, in this case, item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty-free status for these goods.
The obligations under this legislation are clearly defined for both the applicant and the CEO. The applicant must ensure that their application is valid and meets all the specified criteria, including the absence of substitutable goods produced in Australia. The CEO, on the other hand, is responsible for reviewing the application, publishing a notice in the Gazette (as per section 269K(1)), and inviting any interested parties to submit their views. If no submissions are received, the CEO proceeds to make the TCO. Furthermore, under section 126(1)(r) of the Regulations, importers of the specified goods can apply for a refund of duty on goods imported since the TCO's effective date.
Breaching the provisions of this legislation can lead to significant consequences. The Customs Act 1901 stipulates various offences and penalties for non-compliance, though the specific penalties for breaches related to TCOs are not detailed in the provided text. Generally, under Australian law, violations of customs regulations can result in civil or criminal penalties, including fines and potential imprisonment, depending on the severity of the breach. The precise penalties would depend on the nature of the violation and the discretion of the court. The overarching intent of these provisions is to ensure that the tariff concession scheme operates fairly and efficiently, protecting both the interests of importers and the regulatory framework governing customs duties.