EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516051
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 Insulating Sleeve or Ribbon on 16 November 2005.
Instrument
TCO No 0516051 was made on 13 February 2006. It declares that those certain Insulating Sleeve or Ribbon 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. 0516051 is taken to have come into force on 16 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. 0516051 was enacted in 2006 under the Customs Act 1901, to provide tariff concessions for certain goods. This legislation was introduced to address a gap in the customs duty structure by allowing for lower rates of customs duty on goods specified in a Tariff Concession Order (TCO). The enacting body responsible for this instrument is the Chief Executive Officer of Customs, who must evaluate applications for TCOs to determine if they meet the core criteria outlined in the Act. The policy objective of this legislation is to ensure that tariff concessions are granted where appropriate, providing economic benefits by reducing the duty on specific imported goods, in turn potentially benefiting importers through possible duty refunds. This process ensures that Australian industries are not unduly disadvantaged by the availability of substitutable goods produced domestically.
Scope and Application
The Tariff Concession Instrument No. 0516051, made under the Customs Act 1901, applies to certain Insulating Sleeve or Ribbon goods as specified by Bluescope Steel Ltd. This instrument allows for the application of a concessional rate of customs duty for these goods, which are otherwise subject to a general rate of 5%. The instrument is specifically targeted at entities involved in the importation of these goods, offering them a reduced rate of duty of 0% as per the prescribed item 50 of Schedule 4 to the Customs Tariff Act 1995. The application of this concessional rate is contingent upon the core criteria being met, specifically that no substitutable goods are produced in Australia at the time of the application. The instrument has a national reach and its implementation does not disadvantage any existing rights of persons, other than the Commonwealth, as it only affects the rights from the date of its registration. The instrument does not impose any new liabilities on any person, although it does provide a benefit to importers by potentially allowing them to apply for a refund of duty on goods imported since the day the concession came into force.
Key Provisions
The key operative sections of Tariff Concession Instrument No. 0516051, under the Customs Act 1901, concern the application and granting of Tariff Concession Orders (TCO) for certain goods. Specifically, section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO. Section 269C establishes that a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Upon satisfaction that the application meets these criteria, section 269P(3) mandates that the CEO must issue a written TCO, specifying the applicable customs duty rate for the goods in question.
The Act imposes several obligations on the parties involved. Firstly, the CEO is required to publish a notice in the Gazette under subsection 269K(1) once an application is accepted as valid, inviting any interested parties to lodge submissions if they believe the TCO should not be made. In this case, no submissions were received. Additionally, the CEO must ensure that the application does not pertain to goods specified in section 269SJ, which lists those ineligible for a TCO.
The Act also delineates potential offences and consequences for non-compliance. While the explanatory statement does not explicitly detail penalties, breaches of customs regulations generally carry significant civil and criminal penalties. Under the Customs Act 1901, penalties for non-compliance can include fines and imprisonment, depending on the severity of the breach. However, this particular TCO focuses on the tariff concession itself and does not explicitly state maximum penalties for breach.
The Tariff Concession Instrument No. 0516051, effective from 16 November 2005, benefits importers by reducing the duty rate for certain Insulating Sleeve or Ribbon from the general rate of 5% to 0%. This reduction applies to goods that meet the specified criteria and ensures that no existing rights or liabilities of persons other than the Commonwealth are adversely affected by the concession. Importers can also apply for duty refunds on goods imported since the effective date of the TCO under paragraph 126(1)(r) of the Regulations.