EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516784
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 cold rolled steel sheet in coils on 09 December 2005.
Instrument
TCO No 0516784 was made on 03 March 2006. It declares that those certain cold rolled steel sheet in coils 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. 0516784 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, specifically augmented by the Tariff Concession Instrument No. 0516784 enacted in 2006, addresses the problem of ensuring that certain goods, such as specific cold-rolled steel sheets, are accessible to Australian consumers at a reduced tariff rate, thereby promoting economic efficiency and supporting industries reliant on such materials. This instrument was introduced to provide tariff concessions on particular goods by allowing the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) when certain criteria are met, such as the absence of substitutable goods produced in Australia. The policy objective is to facilitate the importation of goods by reducing the customs duty on them, thereby benefiting both the producers and consumers by potentially lowering the cost of these goods. The instrument ensures that these tariff reductions do not disadvantage any existing parties or impose new liabilities, maintaining a balance between promoting industry and protecting stakeholders' rights.
Scope and Application
The Tariff Concession Instrument No. 0516784 under the Customs Act 1901 applies to the specific goods, namely certain cold rolled steel sheet in coils, as identified by Bluescope Steel Limited. The instrument is relevant to entities involved in the importation of these goods and any subsequent duty liabilities. The scope of the Act is national, as it operates within the framework of Commonwealth legislation. The application of this Instrument is limited to the goods specified in the TCO and does not extend to other types of goods unless they are specifically included in a subsequent order. Notably, the Act excludes goods listed in section 269SJ, which are ineligible for tariff concessions. The application of the TCO can be further defined or restricted through subordinate instruments, which may specify additional criteria or conditions under which the tariff concession applies. The Instrument aims to benefit importers by potentially allowing them to claim refunds on duties paid on the specified goods since the date the TCO was taken to have come into force.
Key Provisions
The primary operative sections of this legislation are sections 269C, 269F, 269P, and 269S (paragraphs 1 and 2) of the Customs Act 1901. Section 269F allows an application to be made to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO). The CEO must decide whether the application meets the core criteria set out in section 269C, which stipulates that the application will be accepted if, on the date it was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets these criteria, they are required to make a TCO under section 269P(3). Under section 269S, the TCO will come into force on the date on which the application for the TCO was lodged. These sections establish the framework for the creation of TCOs and their effective date.
The Act imposes several obligations and requirements on the parties it governs. Firstly, section 269F mandates that any person who wishes to apply for a TCO must submit an application to the CEO. The CEO, under section 269C, must assess whether the application meets the core criteria, specifically determining if no substitutable goods were produced in Australia on the day the application was lodged. If the application meets the criteria, the CEO is required under section 269P(3) to issue a TCO. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO.
Breaches of the provisions in the Customs Act 1901 can lead to various civil or criminal consequences. While the explanatory statement does not specify penalties for non-compliance with the Act, it is essential to note that any misuse or incorrect application of TCOs could potentially lead to legal actions. The Act encompasses general provisions for penalties for breaches of its provisions, including fines and imprisonment, but the specifics are not outlined in the explanatory statement. Furthermore, section 269SJ of the Act sets out goods that cannot be subject to a TCO, and any attempt to apply for a TCO for these goods would constitute an offence.
In summary, the key provisions of this legislation establish a framework for the creation of Tariff Concession Orders through applications to the CEO, subject to specific criteria. The obligations primarily involve the proper submission and assessment of applications by the CEO, followed by the issuance of TCOs. The potential consequences for non-compliance, while not detailed in the explanatory statement, generally include civil or criminal penalties under the broader provisions of the Customs Act 1901.