EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0515955
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 double enveloping worm gear sets parts on 11 November 2005.
Instrument
TCO No 0515955 was made on 23 January 2006. It declares that those certain double enveloping worm gear sets 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 10%. 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.0515955 is taken to have come into force on 11 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 for the imposition of tariffs and duties on imported goods. To address the need for flexibility in tariff application, the Act allows for the creation of Tariff Concession Orders (TCOs) under Part XVA, which can reduce or eliminate customs duty on certain goods. These orders are made by the Chief Executive Officer of Customs, provided that the application meets core criteria, such as the absence of substitutable goods produced in Australia. This mechanism is designed to support Australian industries by reducing costs and making imported goods more competitive. The explanatory statement for Tariff Concession Instrument No. 0515955, for example, demonstrates the process by which Bluescope Steel Limited successfully applied for a tariff concession on certain double enveloping worm gear sets parts, resulting in a duty reduction from 10% to free. The policy objective is to facilitate economic efficiency and support specific industries by mitigating the financial burden of customs duties.
Scope and Application
The Tariff Concession Instrument No. 0515955, enacted under Part XVA of the Customs Act 1901, applies to entities or individuals who seek a tariff concession order (TCO) for specific goods imported into Australia. This particular instrument was applied to Bluescope Steel Limited’s request for certain double enveloping worm gear set parts, and the Chief Executive Officer of Customs (CEO) granted the TCO after determining that no substitutable goods were produced in Australia. The instrument thereby reduces the customs duty on these parts from the general rate of 10% to free, effective from the date the application was lodged. The geographic scope of this Act is national, impacting all importers of the specified goods within Australia. It is pertinent to note that the Act does not affect any existing rights of individuals or entities as of the registration date, ensuring no disadvantage or new liabilities are imposed on them. This legislative measure facilitates the import process for the specified goods, thereby encouraging trade and potentially benefiting the economy by making these components more affordable.
Key Provisions
The Tariff Concession Instrument No. 0515955, under the Customs Act 1901, provides a specific framework for tariff concessions on certain goods. The primary operative sections involved are sections 269C, 269F, 269P, and 269S (paragraphs referenced in parentheses). Section 269F allows an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of particular goods. If the CEO is satisfied that the application is valid and meets the core criteria, as defined in section 269C, a TCO is made under section 269P. This order effectively lowers the customs duty rate on the specified goods, as outlined in the Tariff Concession Instrument.
The obligations imposed by this legislation primarily rest on the CEO of Customs. The CEO must evaluate the application to determine if it meets the core criteria, which includes ensuring that no substitutable goods are produced in Australia at the time of the application (section 269C). If the application meets these criteria, the CEO must then issue a written TCO, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question (section 269P(3)). Additionally, the CEO is required to publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made, as per section 269K(1). This notice is an essential part of the process to ensure transparency and allow for any objections to be considered before the TCO is finalised.
Failure to comply with the provisions of the Customs Act 1901, including the issuance of a TCO, can result in various penalties. While specific penalties for non-compliance with TCOs are not detailed in the provided text, breaches of the Customs Act generally can attract significant fines and other penalties under section 287 of the Act. For example, unauthorised importation or exportation of goods can lead to fines and imprisonment, with penalties varying based on the severity of the offence and the value of the goods involved. Additionally, any person found to have intentionally made a false statement or provided misleading information in connection with a TCO application may face further criminal charges, including imprisonment for up to two years.
In summary, Tariff Concession Instrument No. 0515955 establishes a mechanism for granting tariff concessions on specific goods, subject to certain criteria and obligations on the CEO of Customs. The Act ensures that the process is transparent and allows for public input, while also outlining potential penalties for non-compliance to ensure adherence to the established regulatory framework.