EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516760
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 Pty Ltd applied for a TCO in respect of certain scale scraper beam parts on 8 December 2005.
Instrument
TCO No 0516760 was made on 13 February 2006. It declares that certain scale scraper beam 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. 0516760 is taken to have come into force on 8 December 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, establishes a framework for the administration of customs and excise. The Act facilitates the imposition of customs duty on goods imported into Australia and provides for certain concessions and exemptions. One of these mechanisms is the Tariff Concession Order (TCO), introduced to address gaps where there is a need to provide tariff relief for specific goods that are not produced domestically or are subject to unique economic circumstances. This legislation allows for a reduction or exemption of customs duties on specified goods to promote economic efficiency and competitiveness. Instrument No. 0516760, made under the Customs Act, exemplifies the application of this scheme, providing tariff relief for certain scale scraper beam parts by Bluescope Steel Pty Ltd, thereby ensuring these goods attract a lower rate of customs duty.
Scope and Application
The Tariff Concession Instrument No. 0516760 under the Customs Act 1901 applies specifically to the importation of certain scale scraper beam parts, which are subject to a tariff concession order (TCO) made by the Chief Executive Officer of Customs (CEO). The act targets importers and industry stakeholders who deal with these specific goods, aiming to provide a lower rate of customs duty for the specified items by ensuring that no substitutable goods are produced in Australia at the time of the application. The TCO is effective from the date the application was lodged, 8 December 2005, and applies to the Commonwealth jurisdiction. The application process involves the CEO assessing whether the application meets the core criteria, which include the absence of substitutable goods produced in Australia in the ordinary course of business. Exemptions or exclusions are limited to goods specified in section 269SJ of the Act that cannot be subject to a TCO. The instrument is part of a broader scheme under Part XVA of the Customs Act 1901, which allows for the creation of TCOs to facilitate trade by reducing customs duties on certain goods.
Key Provisions
The Tariff Concession Instrument No. 0516760, as outlined in the Customs Act 1901 (section 269F), establishes a process for the Chief Executive Officer of Customs (CEO) to grant Tariff Concession Orders (TCOs) for certain goods, allowing them to benefit from a lower rate of customs duty. This process is initiated when a person applies for a TCO in respect of specific goods (section 269C). The CEO must determine whether the application meets the core criteria, which include ensuring that no substitutable goods are produced in Australia in the ordinary course of business (section 269C and 269D). Once the CEO is satisfied that the application meets these criteria, they must issue a written order, or TCO, specifying the lower duty rate for the goods in question (section 269P(3)).
The obligations imposed by the Act on the parties involved are primarily on the applicant and the CEO. The applicant must ensure their application for a TCO is valid and meets the core criteria, particularly the absence of substitutable goods produced in Australia. The CEO, on the other hand, is obligated to review the application, publish a notice in the Gazette inviting submissions from any interested parties, and decide whether to grant the TCO based on the information provided (subsection 269K(1)). The CEO must also ensure that the TCO does not impose any liabilities on any person and does not disadvantage anyone other than the Commonwealth (subsection 269S(1)).
Failure to comply with the requirements of the Customs Act 1901 or the conditions of a TCO may result in civil or criminal consequences. While the specific penalties are not detailed in the Explanatory Statement, breaches of customs laws generally carry significant penalties under the Customs Act and related legislation. For example, under section 243 of the Customs Act, a person found guilty of an offence may face imprisonment for up to five years, a fine of up to $22,200 for individuals or $111,000 for corporations, or both. The severity of the penalty depends on the nature and circumstances of the offence, and the courts have the discretion to impose penalties within the statutory maximums. Additionally, persistent or egregious breaches may also result in criminal prosecution and further penalties.