EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516052
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 refractory insulating board on 16 November 2005.
Instrument
TCO No 0516052 was made on 13 February 2006. It declares that those certain refractory insulating boards 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. 0516052 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 Customs Act 1901 was enacted to provide a framework for the regulation of customs and excise in Australia, including the imposition of customs duties on imported goods. The Tariff Concession Instrument No. 0516052, issued in 2006, operates under Part XVA of the Act, which allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that provide for a lower rate of customs duty on specified goods. This legislative instrument addresses the gap in providing targeted tariff relief to importers by reducing the duty on certain goods, provided that no substitutable goods are produced in Australia. The instrument was developed by the CEO of Customs and was published in accordance with the Act's requirements, which include a period for public consultation where no objections were raised. The policy objective of this measure is to support specific industries by lowering the cost of imported goods, thereby facilitating trade and economic efficiency without disadvantaging existing rights or imposing new liabilities on importers.
Scope and Application
The Tariff Concession Instrument No. 0516052 is a specific legislative instrument under Part XVA of the Customs Act 1901, which allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This instrument applies to entities and individuals who seek to import goods that are not produced in Australia and meet the criteria for tariff concessions, thereby qualifying for a lower rate of customs duty. The instrument has a national reach across Australia as it operates under the Commonwealth framework established by the Customs Act. The application of this legislation is restricted to goods that are not substitutable by Australian-produced goods, as outlined in section 269SJ of the Act, which explicitly lists goods that cannot be subject to a TCO. The application process includes a public notification step where potential objections can be lodged, although in this case, no objections were received. The commencement of this TCO is effective from the date the application was made, in this instance, 16 November 2005. This specific TCO does not affect any pre-existing rights or impose new liabilities on individuals or entities, except for potential benefits to importers who can apply for duty refunds on goods imported since the effective date of the concession.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) relevant to Tariff Concession Orders (TCOs) are sections 269F, 269C, 269B, 269D, 269E, and 269P. Section 269F allows an application for a TCO to be made to the Chief Executive Officer of Customs (the CEO). If the application is not in respect of goods specified in section 269SJ, which are goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria set out in section 269C. For an application to meet the core criteria, it must be established that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined in sections 269B, 269D, and 269E.
The obligations and requirements imposed by the Act on the parties or entities it governs include ensuring that any TCO application made under section 269F is not in respect of goods specified in section 269SJ. If the CEO is satisfied that the application meets the core criteria, they must make a written order, a TCO, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) that applies to the goods in question. The CEO must also publish a notice in the Gazette, inviting any person who considers there are reasons why the TCO should not be made to lodge a submission with the CEO, as required by subsection 269K(1). In this case, no submissions were received in response to the published notice.
Under the Act, the CEO has the authority to impose various consequences for breaches of the provisions. Any person who fails to comply with the conditions set out in a TCO may face criminal and/or civil penalties. Specifically, under subsection 134(1) of the Act, a person who contravenes a TCO may be liable to a penalty of up to 10 penalty units for each offence, in addition to any other penalties that may apply under the Act or other legislation. The maximum penalty for a criminal offence under the Act is 100 penalty units, or imprisonment for five years, or both, depending on the nature and severity of the offence. The Act also provides for civil penalties, including fines and compensation, for breaches of its provisions.