EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516607
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 walking beam furnace parts on 25 November 2005.
Instrument
TCO No 0516607 was made on 13 February 2006. It declares that those certain walking beam furnace 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 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. 0516607 is taken to have come into force on 25 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 under which Tariff Concession Orders (TCOs) can be made to offer preferential rates of customs duty on certain goods. The introduction of Part XVA addresses the gap in the existing customs duty system by allowing for the application of reduced duty rates under specific circumstances, promoting economic efficiency and competitiveness in industries where local production of substitutable goods is not viable. The Tariff Concession Instrument No. 0516607, made on 13 February 2006, is a specific instance where the Chief Executive Officer of Customs granted a concession to Bluescope Steel Limited for certain walking beam furnace parts, setting their duty rate to free, down from the general rate of 5%. This instrument was enacted to ensure that the application of the concession does not disadvantage any existing rights and allows importers to apply for duty refunds for goods imported since the effective date of the concession.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders apply to goods specified by the CEO upon application and are contingent on meeting core criteria, primarily that no substitutable goods are produced in Australia in the ordinary course of business. The Act allows individuals or entities to apply for a TCO if the goods in question are not excluded under section 269SJ. If the CEO is satisfied that the application meets the core criteria, they must issue a TCO, effectively applying a lower rate of customs duty to the specified goods. For instance, TCO No. 0516607 was issued for certain walking beam furnace parts, reducing their duty rate from 5% to free. The application of this Act is nationwide, as it is a Commonwealth Act, and it does not retroactively affect the rights of any person except the Commonwealth. Additionally, the CEO is required to publish notices in the Gazette inviting submissions from interested parties, although no submissions were received for TCO No. 0516607. The TCO comes into effect on the date the application is lodged, and it does not impose any liabilities on persons other than the Commonwealth.
Key Provisions
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders apply a reduced rate of customs duty to goods specified in the order, which in this instance, are certain walking beam furnace parts applied for by Bluescope Steel Limited (sections 269F, 269C, 269B, 269D, and 269E). The CEO's decision to issue a TCO hinges on whether the application complies with the core criteria, primarily whether no substitutable goods are produced in Australia at the time the application is made (section 269P(3)). For TCO No. 0516607, the CEO determined that no such substitutable goods existed, thus making the order effective from the date of application, 25 November 2005 (subsection 269S(1)).
The Act imposes specific obligations on both the applicant and the CEO. Bluescope Steel Limited, as the applicant, must ensure that their application is made in accordance with the Act and provides all necessary information to demonstrate that the core criteria are met. The CEO, on the other hand, is required to review the application, consider any submissions from interested parties, and make a decision based on the evidence presented. If satisfied, the CEO must issue a written order declaring the goods to which the TCO applies (subsection 269K(1)). In this case, the CEO was required to publish a notice in the Gazette inviting any objections to the application, although none were received.
Failure to comply with the requirements of the Customs Act 1901 or the terms of a TCO can lead to various legal consequences. While the explanatory statement does not detail specific offences under the Act, it is reasonable to infer that breaches may result in civil or criminal penalties as prescribed elsewhere in the Act. These could include fines or other penalties, although the exact nature and extent of these penalties are not specified within this context. The Act's overarching purpose is to regulate the import and export of goods, ensuring that any tariff concessions are granted fairly and in accordance with legislative criteria.