EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516608
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 Downtake Pipe Flanges on 25 November 2005.
Instrument
TCO No 0516608 was made on 13 February 2006. It declares that those certain Downtake Pipe Flanges 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. 0516608 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 Australian Parliament, includes provisions for Tariff Concession Orders (TCOs) to address specific economic and trade-related issues. These orders allow for the reduction or exemption of customs duties on certain goods, provided that the application meets core criteria, such as the absence of substitutable goods produced in Australia. The primary objective of the Act, as illustrated by TCO No. 0516608, is to facilitate trade by reducing the financial burden on importers of specified goods, thereby promoting economic efficiency and competitiveness. This particular TCO, effective from 25 November 2005, was issued for certain Downtake Pipe Flanges, resulting in a reduction of the duty rate from 5% to 0%, as no substitutable goods were being produced in Australia at the time of application.
Scope and Application
The Tariff Concession Instrument No. 0516608 under the Customs Act 1901 applies to goods that are the subject of a Tariff Concession Order (TCO), specifically certain Downtake Pipe Flanges for Bluescope Steel Ltd. The Act enables the Chief Executive Officer of Customs to make a TCO that provides a lower rate of customs duty for the specified goods, provided the core criteria are met, which include the absence of substitutable goods produced in Australia. The application of this TCO is national in scope, aligning with the overarching framework set out in the Customs Act 1901. The instrument extends to all entities and persons involved in the importation of the specified goods, thereby directly impacting the customs duty obligations of importers. The TCO does not apply to goods specified in section 269SJ of the Act, which outlines goods ineligible for tariff concessions. Additionally, the CEO's decision to issue a TCO is contingent upon no submissions being received against the order after an invitation for objections was published in the Gazette. The TCO is effective from the date the application was lodged, which in this case is 25 November 2005, and it does not retroactively affect the rights of any person or impose new liabilities on anyone.
Key Provisions
The Tariff Concession Instrument No. 0516608 under the Customs Act 1901 (the Act) establishes a lower rate of customs duty for certain Downtake Pipe Flanges. Section 269F of the Act allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of goods. If the CEO is satisfied that the application meets the core criteria, they must make a written order declaring that the goods are subject to a prescribed rate of duty as specified in Schedule 4 of the Customs Tariff Act 1995 (the Tariff). For the Downtake Pipe Flanges, the general rate of duty is 5%, but the TCO reduces this to 0%.
The CEO has specific obligations under the Act when considering a TCO application. According to section 269C, the 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. Section 269P(3) mandates that if the CEO is satisfied that the application meets these criteria, they must make a TCO. For the Downtake Pipe Flanges, the CEO determined that no substitutable goods were produced in Australia, leading to the issuance of TCO No. 0516608. Additionally, the CEO must publish a notice in the Gazette inviting any person who believes the TCO should not be made to lodge a submission (subsection 269K(1)). However, no submissions were received in response to the notice for this TCO.
The TCO imposes certain obligations on the parties it governs. For Bluescope Steel Ltd, the applicant, the TCO allows for the importation of certain Downtake Pipe Flanges at a reduced duty rate. Importers of these goods are now entitled to apply for a refund of duty on goods imported since the TCO came into force, as per paragraph 126(1)(r) of the Regulations. The TCO does not affect the rights of any person as at the date of registration in a way that would disadvantage them or impose liabilities for actions taken before the registration date.
In terms of consequences for breach, the Act does not specify offences or penalties directly related to the issuance or enforcement of TCOs. However, any breach of the conditions under which the TCO is granted or any fraudulent application could potentially lead to civil or criminal consequences. Importers must ensure compliance with the terms of the TCO to avoid any legal repercussions that may arise from non-compliance or misrepresentation of facts in their applications.