EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516885
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 thermal oxidizer parts on 30 November 2005.
Instrument
TCO No 0516885 was made on 13 February 2006. It declares that certain thermal oxidizer 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. 0516885 is taken to have come into force on 30 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, enacted by the Australian Parliament, provides a framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs). The purpose of these orders is to allow for lower rates of customs duty on certain goods when specific conditions are met, thereby facilitating trade and supporting economic activity. TCO No. 0516885 was introduced to address the need for tariff concessions on certain thermal oxidizer parts, which were not being produced in Australia at the time. The Chief Executive Officer of Customs (CEO) assessed the application by Bluescope Steel Pty Ltd and determined that the concession was warranted, as no substitutable goods were being produced domestically. This decision was made in accordance with the core criteria outlined in the Act, specifically under sections 269C and 269SJ, ensuring that the concession would not negatively impact existing Australian production. The order was published in the Gazette, inviting any interested parties to voice their opinions, though no submissions were received. The TCO came into effect on 30 November 2005, the date the application was lodged, and benefits importers by allowing them to apply for duty refunds on eligible goods imported since that date.
Scope and Application
The Customs Act 1901 provides a framework under which Tariff Concession Orders (TCOs) can be issued to reduce the customs duty on certain goods. Specifically, Part XVA of the Act allows the Chief Executive Officer of Customs to grant TCOs if the application meets core criteria, notably if no substitutable goods are produced in Australia. The legislation applies to any person or entity seeking tariff concessions on goods, provided that the goods are not specified in section 269SJ of the Act, which outlines those goods that cannot be subject to a TCO. The application of the Act is national in scope, extending across the Commonwealth of Australia. The Act also provides for the CEO to issue subordinate instruments to further define terms such as 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods'. TCO No. 0516885, for instance, was issued for certain thermal oxidizer parts, granting them a duty-free status under item 50 of Schedule 4 to the Tariff. The TCO came into effect on the date the application was lodged, 30 November 2005, and it does not affect any pre-existing rights or impose liabilities on persons other than the Commonwealth.
Key Provisions
The Customs Act 1901, specifically Part XVA, establishes a framework under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). When a person applies for a TCO in respect of goods, section 269F of the Act mandates that the CEO must consider the application unless it pertains to goods listed in section 269SJ, which cannot be subject to a TCO. If the application is deemed valid, the CEO is required to determine whether it meets the core criteria outlined in section 269C, which includes ensuring that no substitutable goods were produced in Australia on the date the application was lodged. A substitutable good, as defined in section 269D, is a product produced in Australia that can be used in a manner corresponding to the goods in question.
The obligations imposed by the Customs Act on entities applying for a TCO include ensuring that the application complies with the specified criteria and that the goods in question do not have Australian-made equivalents. The CEO must also publish a notice in the Gazette (subsection 269K(1)), inviting any person who believes the TCO should not be made to submit their reasons. In the case of TCO No. 0516885, no submissions were received, indicating a general acceptance or lack of opposition to the concession. The TCO's effective date is the date of application submission (subsection 269S(1)), which in this case was 30 November 2005. This date also marks the point from which importers can apply for refunds of duty paid on goods imported prior to the TCO’s effective date.
Regarding the potential consequences of breaching the provisions of the Customs Act, it is important to note that the Act does not specify penalties for failing to comply with the TCO requirements directly. However, broader penalties for non-compliance with customs regulations, as detailed in other sections of the Act and related legislation, may apply. These can include fines and imprisonment for serious breaches. For example, knowingly making a false statement or representation in a customs document can result in a penalty of up to five times the amount of duty or tax evaded, or imprisonment for up to two years, or both, as stipulated under section 234 of the Customs Act. The specific penalties depend on the nature and severity of the breach.