EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0515956
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 on 11 November 2005.
Instrument
TCO No 0515956 was made on 23 January 2006. It declares that those certain double enveloping worm gear sets 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.0515956 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 a framework for the regulation of customs and excise duties. The Act establishes a scheme under which Tariff Concession Orders (TCOs) can be made, allowing for lower rates of customs duty on specified goods. Enacted to address the need for flexibility in tariff regulation, the Act enables the Chief Executive Officer of Customs to grant tariff concessions to applicants who demonstrate that the goods in question are not substitutable by Australian-produced goods. This mechanism allows for the adjustment of tariff rates based on specific market conditions and the availability of domestically produced alternatives. The policy objective underpinning the Act is to facilitate international trade by providing tariff relief where appropriate, thereby supporting economic growth and competitiveness.
Scope and Application
The Tariff Concession Instrument No. 0515956, made under section 269F of the Customs Act 1901, applies to specific goods, in this case certain double enveloping worm gear sets, which have been granted a tariff concession order by the Chief Executive Officer of Customs. The Act enables the CEO to reduce the rate of customs duty on goods provided certain criteria are met, specifically that no substitutable goods are produced in Australia at the time of the application. This concession is intended to benefit importers by potentially reducing the duty on these goods to free, as opposed to the general rate of 10%. The instrument extends to the Commonwealth of Australia and impacts the importation of the specified goods, allowing for tariff concessions based on the outlined criteria. While the Act allows for the CEO to consider applications from any person or entity, this particular TCO was made for Bluescope Steel Limited. The application of the TCO does not disadvantage any person other than the Commonwealth and does not impose liabilities on any person for actions taken before the instrument's registration.
Key Provisions
The Customs Act 1901, specifically under Part XVA, introduces a scheme whereby Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). When a TCO is applied for and granted under section 269F, it allows for a lower rate of customs duty on the specified goods. Section 269C sets out the core criteria for an application to be considered, which includes the condition that, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business. The term "substitutable goods" is defined under section 269D and is understood to mean goods produced in Australia that can be used in a manner similar to the goods for which the TCO is being applied (section 269E).
Once the CEO is satisfied that the application meets the core criteria, a TCO is issued under section 269P(3), specifying the reduced duty on the goods in question. For instance, in the case of Bluescope Steel Limited, a TCO was issued for certain double enveloping worm gear sets, reducing the duty from 10% to free under item 50 of Schedule 4 to the Customs Tariff Act 1995. The TCO does not retroactively affect the rights or liabilities of any person other than the Commonwealth, ensuring that it only benefits importers who can apply for a refund of duty on goods imported since the TCO's effective date.
The CEO is mandated to publish a notice in the Gazette, inviting any person who might have objections to the TCO to submit their views under subsection 269K(1). In this case, no submissions were received, thereby allowing the TCO to proceed without opposition. Subsection 269S(1) ensures that the TCO is considered effective from the date the application was lodged, which for TCO No. 0515956 was 11 November 2005.
Regarding the consequences of non-compliance, the Act does not specify offences or penalties for failing to adhere to the TCO provisions. However, it is imperative that all parties involved comply with the conditions and deadlines outlined in the TCO. Any breach of the terms might lead to administrative actions or financial penalties as prescribed by other relevant sections of the Customs Act 1901 or associated regulations.