EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516782
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 hydraulic recirculator proportional throttles on 09 December 2005.
Instrument
TCO No 0516782 was made on 03 March 2006. It declares that those certain hydraulic recirculator proportional throttles 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. 0516782 is taken to have come into force on 09 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, provides for the administration of customs and excise duties and regulates the importation and exportation of goods. It includes a scheme under which Tariff Concession Orders (TCOs) can be made, as outlined in Part XVA of the Act. These orders allow for lower rates of customs duty on certain goods, subject to specific criteria. The problem or gap this legislative scheme addresses is the need to provide tariff relief on goods that are not produced domestically or for which there are no suitable domestic substitutes, thereby supporting industries and consumers by reducing the cost of imported goods. The Tariff Concession Instrument No. 0516782 was enacted to address a specific application by Bluescope Steel Limited for tariff concessions on certain hydraulic recirculator proportional throttles, ensuring that the application of the concessions does not disadvantage existing rights or impose new liabilities on individuals or entities.
Scope and Application
The Tariff Concession Instrument No. 0516782 under the Customs Act 1901 applies specifically to the goods known as certain hydraulic recirculator proportional throttles, which are subject to a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs (CEO). This legislation is applicable to Bluescope Steel Limited, the entity that applied for the TCO. The Act allows for the application of a lower rate of customs duty on goods that meet the core criteria and are not specified in section 269SJ, which excludes certain goods from eligibility. The application of the TCO is geographically and jurisdictionally within Australia, as it concerns the importation of goods subject to the Australian customs tariff. The CEO's decision to grant the TCO is based on the absence of substitutable goods produced in Australia in the ordinary course of business, as outlined in sections 269C and 269P of the Act. The instrument does not extend to impose any liabilities or disadvantage any person, including the Commonwealth, and does not affect rights as at the date of registration. Any importation of the specified goods since the date the TCO was taken to be in force on 09 December 2005, may qualify for a refund of duty.
Key Provisions
The Tariff Concession Instrument No. 0516782, under the Customs Act 1901, establishes a tariff concession order (TCO) for certain hydraulic recirculator proportional throttles, lowering their customs duty rate to free from the general rate of 5%. Section 269F of the Act allows individuals to apply to the Chief Executive Officer of Customs (CEO) for a TCO if the goods in question are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. The CEO must then determine if the application meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia at the time the application was lodged. The CEO's decision to grant the TCO is based on satisfying the core criteria as outlined in section 269B, which defines the terms "goods produced in Australia," "ordinary course of business," and "substitutable goods."
Under the Act, the CEO has specific obligations when handling a TCO application. Once a TCO application is deemed valid, the CEO must publish a notice in the Gazette under subsection 269K(1), inviting any interested parties to submit objections if they believe the TCO should not be granted. In this case, no submissions were received in response to the published notice. The TCO comes into force on the day the application was lodged, as per subsection 269S(1), meaning TCO No. 0516782 took effect on 9 December 2005. Importantly, the TCO does not affect the rights of any person, except the Commonwealth, as it does not disadvantage them or impose liabilities for actions taken before the TCO's registration.
Should there be any breaches of the provisions outlined in the Customs Act 1901 or the associated regulations, penalties and consequences may apply. While the specific penalties are not detailed in the explanatory statement, breaches of customs regulations generally can lead to substantial fines, penalties, and potential criminal charges. For instance, knowingly making a false statement or representation in relation to customs duty can result in fines of up to 10,000 penalty units or imprisonment for up to five years, or both, under section 257 of the Customs Act 1901. These severe consequences underscore the importance of compliance with the legislative requirements and obligations.