EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516646
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 0516646 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. 0516646 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 Tariff Concession Instrument No. 0516646 was enacted under the Customs Act 1901 to provide tariff concessions for certain walking beam furnace parts, as applied for by Bluescope Steel Limited. This legislation was introduced to address the gap in the tariff rates for these specific goods by reducing the customs duty to zero, which is a lower rate than the general duty of 5% as specified in the Customs Tariff Act 1995. The instrument was made by the Chief Executive Officer of Customs, who is responsible for deciding on tariff concession orders when applications are submitted under section 269F of the Customs Act. The policy objective is to ensure that the application meets the core criteria as stipulated in section 269C, particularly that no substitutable goods were produced in Australia at the time of application. This measure benefits the rights of importers by potentially allowing them to apply for a refund of duty on goods imported since the effective date of the tariff concession.
Scope and Application
The Tariff Concession Instrument No. 0516646, under the Customs Act 1901, applies to entities seeking tariff concessions for certain goods, specifically in this case, Bluescope Steel Limited's application for walking beam furnace parts. The Act allows the Chief Executive Officer of Customs to grant such concessions if the goods are not substitutable by any produced in Australia and meet the specified criteria, thereby allowing for a reduced rate or exemption from customs duty. The instrument’s application is restricted geographically to Australia and is governed by the Commonwealth. The instrument’s effectiveness is contingent on the absence of objections following its publication in the Gazette, which in this instance, did not occur. The tariff concession does not retroactively affect the rights or liabilities of any person other than the Commonwealth and is effective from the date the application was lodged, 25 November 2005, in this case. The instrument may be extended or detailed further through subordinate instruments as required.
Key Provisions
The main operative sections of the Customs Act 1901, particularly under Part XVA, establish a framework for Tariff Concession Orders (TCOs) (sections 269C, 269F, 269K, 269P, 269S, 269SJ). Section 269F allows for an application to the Chief Executive Officer of Customs (CEO) to reduce customs duty on specific goods if certain criteria are met. The CEO must consider whether the application meets the core criteria set out in section 269C, which requires that no substitutable goods are produced in Australia in the ordinary course of business. If these criteria are satisfied, the CEO is mandated to issue a written order as a TCO (section 269P(3)). Additionally, subsection 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from interested parties if a TCO application is accepted as valid.
The Customs Act imposes several obligations on the parties involved. The CEO has the responsibility to assess whether a TCO application complies with the core criteria, specifically checking that no substitutable goods are produced in Australia in the ordinary course of business (section 269C). Once the CEO is satisfied that an application meets these criteria, they must issue a TCO (section 269P(3)). Furthermore, upon accepting a valid TCO application, the CEO must publish a notice in the Gazette, inviting any interested person to submit objections or reasons why the TCO should not be made (subsection 269K(1)). Importers, on the other hand, can benefit from the TCO by applying for a refund of duty on goods imported since the TCO came into effect (paragraph 126(1)(r) of the Regulations).
The Act does not explicitly outline specific offences, penalties, or civil/criminal consequences for breaches related to TCOs. However, the CEO's decision-making process is guided by statutory requirements, and failure to comply with these could potentially lead to legal challenges or administrative reviews. The TCO itself does not impose any liabilities on any person, ensuring that the rights of individuals are not adversely affected (subsection 269S(1)). Consequently, any legal or administrative repercussions would likely stem from procedural errors or misinterpretations of the Act rather than direct breaches of the TCO itself.