EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516648
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 Walking Beam Furnace Parts on 25 November 2005.
Instrument
TCO No 0516648 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 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. 0516648 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, establishes a framework through which the Chief Executive Officer of Customs can issue Tariff Concession Orders (TCOs) to apply lower rates of customs duty on certain goods. This Act was introduced to address the need for a structured mechanism to provide tariff concessions on specific goods, ensuring that such concessions are granted fairly and transparently. The policy objective, as outlined in the Act, is to provide relief to applicants when no substitutable goods are produced in Australia in the ordinary course of business. This particular piece of legislation aims to facilitate smoother trade operations by reducing the duty burden on imported goods that do not have local alternatives. The Explanatory Statement for Tariff Concession Instrument No. 0516648, made under this Act, details the process undertaken to grant a tariff concession to Bluescope Steel Ltd for certain Walking Beam Furnace Parts, effectively reducing the duty on these parts from 5% to 0%.
Scope and Application
The Customs Act 1901, through its Part XVA, establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders provide a lower rate of customs duty on specified goods, contingent on meeting certain criteria. The Act applies to any person or entity that seeks to reduce their customs duty obligations by applying for a TCO, provided the goods in question are not those explicitly excluded under section 269SJ of the Act. This exclusion list includes certain specified goods that cannot be subject to a TCO, such as those that are produced domestically or could be substituted by domestically produced goods. The TCO mechanism is available on a national level across Australia, applying uniformly regardless of state or territory boundaries. The scope of the Act is further refined through subordinate instruments, which may include regulations that provide detailed definitions and additional criteria for determining eligibility for tariff concessions. Notably, the TCO does not affect pre-existing rights or liabilities of any person except the Commonwealth, ensuring that its implementation does not disadvantage those who had already acted based on previous duty rates.
Key Provisions
The Customs Act 1901, particularly Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (section 269F). When an entity like Bluescope Steel Ltd applies for a TCO for specific goods, such as certain Walking Beam Furnace Parts, the CEO assesses whether the application meets the core criteria (section 269C). If the application is deemed valid, a TCO is issued, which reduces the customs duty on those goods from the general rate to a lower specified rate (section 269P(3)). For instance, in TCO No. 0516648, the duty on Walking Beam Furnace Parts was reduced from 5% to 0%.
The Act imposes several obligations on both the CEO and the applicants for a TCO. The CEO must ensure that the application does not pertain to goods that are explicitly excluded under section 269SJ and must verify that no substitutable goods are produced in Australia on the application date (section 269C). Furthermore, the CEO is mandated to publish a notice in the Gazette inviting submissions from any interested parties who might have reasons to oppose the TCO (subsection 269K(1)). Bluescope Steel Ltd, as the applicant, must provide sufficient evidence and information to satisfy the CEO that their application meets the criteria for a TCO.
Failure to comply with the provisions of the Customs Act 1901 concerning TCOs can lead to various consequences. While the explanatory statement does not explicitly detail offences or penalties, the Act generally includes provisions for fines and imprisonment for breaches. The specific penalties would be determined in accordance with other relevant sections of the Act or associated regulations, depending on the nature and severity of the breach. The TCO itself, however, does not impose any new liabilities on individuals or entities other than the Commonwealth and ensures that existing rights are preserved (subsection 269S(1)).