EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516883
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 blast furnace goggle valve parts on 29 November 2005.
Instrument
TCO No 0516883 was made on 13 February 2006. It declares that those certain blast furnace goggle valve 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. 0516883 is taken to have come into force on 29 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 was enacted by the Parliament of Australia to regulate customs and excise duties, among other things. The Act was amended to include Part XVA, which facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. The problem this part addresses is the provision of tariff concessions to importers for goods not produced in Australia, ensuring that Australian businesses are not disadvantaged by local production. The explanatory statement for Tariff Concession Instrument No. 0516883 details that Bluescope Steel Limited applied for a TCO concerning certain blast furnace goggle valve parts, which was granted as no substitutable goods were being produced domestically. The instrument aims to provide a tariff concession by setting the duty rate at free, as opposed to the general rate of 5%, thereby benefiting importers of these specific goods without imposing liabilities on any party.
Scope and Application
The Customs Act 1901 provides a framework for the application of Tariff Concession Orders (TCOs) to reduce the rate of customs duty on specific goods. This legislative mechanism applies to entities seeking tariff concessions for imported goods, provided those goods meet specific criteria, such as not having substitutable goods produced in Australia. The Act applies to the Chief Executive Officer of Customs, who has the authority to make written orders declaring the tariff rate for goods subject to a TCO application. In this instance, TCO No. 0516883 was made in response to an application from Bluescope Steel Limited for blast furnace goggle valve parts, setting the duty rate at free, down from the general rate of 5%. This concession is effective from the date the application was lodged, 29 November 2005, and does not retroactively affect the rights of any person other than the Commonwealth. Additionally, importers of these goods can apply for a refund of duties paid since the effective date of the TCO.
Key Provisions
The Customs Act 1901 (section 269F) allows for the application of Tariff Concession Orders (TCOs) which can reduce the customs duty on specific goods. Section 269C outlines that a TCO application is valid if no substitutable goods are produced in Australia on the date the application is lodged. The definition of "substitutable goods" is provided in section 269D, which refers to goods produced in Australia that are used, or capable of being used, in a manner similar to the goods in question. The Chief Executive Officer of Customs (CEO) must make a written order (section 269P(3)) if satisfied that the application meets these criteria. This order specifies the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods, thereby reducing their duty rate. For instance, TCO No. 0516883 (section 269S(1)) was made effective from 29 November 2005 for certain blast furnace goggle valve parts, which now enjoy a duty-free status under item 50 of the Tariff.
The Customs Act 1901 imposes several obligations on the CEO when processing TCO applications. Under section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who may have reasons against the concession. If no submissions are received, the CEO proceeds to decide on the application. The CEO's decision to grant a TCO is contingent upon the absence of substitutable goods produced in Australia, as outlined in section 269C. Additionally, the Act mandates that the TCO does not affect the rights of any person, except the Commonwealth, and does not impose any liabilities for actions taken before the TCO's effective date (section 269S).
Failure to comply with the requirements of the Customs Act 1901 can lead to various legal consequences. While specific penalties are not detailed in the provided text, breaches of customs regulations generally attract both civil and criminal penalties under the Customs Act 1901. Civil penalties may include fines and the recovery of unpaid duty. Criminal penalties could include imprisonment, reflecting the severity of non-compliance with customs regulations. These penalties serve to enforce adherence to the Act's provisions and ensure that the tariff concession scheme operates as intended.