EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516027
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 spike roll crusher worm and spur gearbox universal shafts on 15 November 2005.
Instrument
TCO No 0516027 was made on 13 February 2006. It declares that those certain spike roll crusher worm and spur gearbox universal shafts 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. 0516027 is taken to have come into force on 15 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 was enacted by the Parliament of Australia to regulate the importation and exportation of goods, including the collection of customs duty. One of its features is the ability to grant tariff concession orders (TCOs) to reduce customs duty on specified goods, provided certain criteria are met. The Tariff Concession Instrument No. 0516027, made under this Act, aims to provide a lower rate of customs duty on certain spike roll crusher worm and spur gearbox universal shafts by declaring that no substitutable goods were produced in Australia. The instrument was introduced to address the need for tariff concessions to support Australian industries by reducing the cost of imported goods, thereby making them more competitive. The policy objective of this particular instrument is to facilitate the importation of these specific goods without imposing any additional duties, benefiting the rights of importers and potentially stimulating industry growth.
Scope and Application
The Customs Act 1901, under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This instrument allows for a lower rate of customs duty to be applied to goods specified in a TCO. The Act applies to any individual or entity that submits an application for a TCO, provided the goods in question are not those listed in section 269SJ, which are ineligible for tariff concessions. The process is geographically and jurisdictionally confined to Australia, as the Customs Act is a Commonwealth law. The Act also extends its application through subordinate instruments such as the Customs Tariff Act 1995, which sets the prescribed rates of duty. Notably, the Act does not disadvantage any person by affecting their rights as at the date of registration of a TCO and does not impose any liabilities on individuals or entities for actions taken prior to the TCO's registration. The application of TCOs is further governed by the requirement for the CEO to publish notices in the Gazette, inviting public submissions on proposed TCOs, although in the case of TCO No. 0516027, no submissions were received.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0516027, under the Customs Act 1901 (referred to as the Act), pertain to the process and conditions for granting Tariff Concession Orders (TCOs) (sections 269C, 269F, 269P(3)). Specifically, section 269F allows for an application to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. If the application meets the core criteria, which include the absence of substitutable goods produced in Australia in the ordinary course of business (section 269C), the CEO must make a written order (TCO) that applies a prescribed item of Schedule 4 to the Customs Tariff Act 1995, effectively reducing the duty rate. For instance, TCO No. 0516027, which was made on 13 February 2006, declared that certain spike roll crusher worm and spur gearbox universal shafts would be subject to a free rate of duty instead of the general 5% rate (section 269P(3)).
The obligations and requirements imposed by the Act on the parties involved include the need for the CEO to publish a notice in the Gazette when a TCO application is accepted as valid, inviting submissions from any person who believes the TCO should not be granted (subsection 269K(1)). In the case of TCO No. 0516027, no submissions were received. Furthermore, the TCO does not affect the rights of any person, other than the Commonwealth, as they stood at the date of registration, nor does it impose any liabilities on any person for actions taken before the TCO was registered (subsection 269S(1)). Importers of the affected goods can benefit from applying for a refund of duty on goods imported since the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations).
Breaching the conditions of a TCO or failing to comply with the Act can lead to various consequences. However, the Explanatory Statement does not detail specific offences, penalties, or civil/criminal consequences for breaches. It is implicit that any breach of the conditions set out in the Act would be subject to the general provisions of the Customs Act 1901, which could include fines, imprisonment, or other penalties as prescribed by law. The maximum penalties for breaches would depend on the specific nature of the breach and the provisions of the Customs Act 1901 and any related regulations.