EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516810
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 paint line regenerative oxidizer waste heat water heaters on 19 December 2005.
Instrument
TCO No 0516810 was made on 17 March 2006. It declares that those certain paint line regenerative oxidizer waste heat water heaters 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. 0516810 is taken to have come into force on 19 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 was enacted to provide a comprehensive framework for the regulation of customs and excise, including the administration of customs duties. Part XVA of the Act establishes the scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs, providing for reduced rates of customs duty on specified goods. Tariff Concession Instrument No. 0516810, issued on 17 March 2006, is an example of such an order that was introduced to address the issue of ensuring that Australian businesses have access to competitively priced imported goods. This particular instrument, which was made in response to an application from Bluescope Steel Limited, declares that certain paint line regenerative oxidizer waste heat water heaters are subject to a free rate of duty, as no substitutable goods were produced in Australia. The policy objective here is to promote fair competition and the economic efficiency of Australian businesses by facilitating the importation of goods that are not produced domestically or are produced at higher costs.
Scope and Application
The Tariff Concession Instrument No. 0516810, made under the Customs Act 1901, applies to goods specified in the instrument, in this case, certain paint line regenerative oxidizer waste heat water heaters. This Act pertains to the administration of customs duties and the granting of tariff concessions by the Chief Executive Officer of Customs. The instrument specifically benefits Bluescope Steel Limited by granting a tariff concession, effectively setting the duty on these goods to free, as opposed to the general rate of 5%. The geographic reach of this Act is nationwide, as it is a Commonwealth instrument. The application process involves an assessment by the CEO to determine if the goods are substitutable by Australian-produced goods, and if not, the CEO must issue a Tariff Concession Order. This process ensures that the concession only applies if it is in the public interest and if no suitable Australian-made alternatives exist. The instrument does not impose any liabilities on any person, and it does not affect the rights of any person as at the date of registration concerning anything done or omitted before the date of registration. The commencement date of the instrument is the date on which the application for the tariff concession was lodged, providing immediate effect from that date.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0516810 (section 269F, 269C, 269B, 269P, and 269SJ of the Customs Act 1901) establish the process for applying for, and granting, a Tariff Concession Order (TCO). A TCO allows for a lower rate of customs duty on specified goods, provided the application meets certain core criteria, such as the absence of substitutable goods produced in Australia (section 269C). If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria (section 269P(3)), they must issue a TCO, effectively reducing the duty rate for the specified goods. In this case, the TCO was granted to Bluescope Steel Limited for certain paint line regenerative oxidizer waste heat water heaters, resulting in a duty rate of free instead of the general rate of 5%.
The Customs Act 1901 imposes several obligations and requirements on the parties involved. The CEO must ensure that any TCO application is not for goods that cannot be subject to a TCO (section 269SJ). Upon receiving a valid application, the CEO must publish a notice in the Gazette, inviting any interested parties to submit objections (subsection 269K(1)). The CEO must then decide whether the application meets the core criteria, which includes verifying that no substitutable goods were produced in Australia (section 269C). If the criteria are met, the CEO must issue the TCO (section 269P(3)).
The instrument also specifies that the TCO will be effective from the date the application was lodged (subsection 269S(1)). This means that the reduced duty rate applies retroactively from 19 December 2005, the date Bluescope Steel Limited applied for the TCO. Furthermore, the TCO does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on anyone (subsection 269S(2)). Importers of the specified goods can apply for a refund of duty paid on those goods since the effective date of the TCO (paragraph 126(1)(r) of the Regulations).
There are no explicit offences, penalties, or consequences for breach detailed in the instrument itself. However, non-compliance with the terms of a TCO or the Customs Act 1901 could potentially result in legal actions or administrative penalties. For instance, failure to accurately declare goods or misapply for a TCO could lead to fines or other penalties as stipulated by relevant sections of the Customs Act or associated regulations. The specific penalties would depend on the nature and severity of the breach, and could involve both civil and criminal consequences.