EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516886
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 Ltd applied for a TCO in respect of certain regenerative thermal oxidizer parts on 30 November 2005.
Instrument
TCO No 0516886 was made on 3 March 2006. It declares that those certain regenerative 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 0%.
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. 0516886 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 regulation of imports and exports, including the imposition of customs duties. Specifically, Part XVA of the Act allows for Tariff Concession Orders (TCOs) to be made by the Chief Executive Officer of Customs, reducing the customs duty on certain goods. This legislative measure was introduced to address the need for tariff concessions in specific cases where no substitutable goods are produced in Australia, thereby facilitating trade and potentially lowering costs for importers. The policy objective is to promote economic efficiency by ensuring that the Australian market has access to competitively priced imported goods where local production does not exist or is not economically viable.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework through which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs) that reduce the rate of customs duty on specified goods. This scheme applies to any person who makes an application to the CEO for a TCO, provided that the goods in question are not those specified in section 269SJ of the Act, which lists goods that are ineligible for a concession. The core criteria for a TCO, as outlined in section 269C, are met if no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. The CEO must then issue a written order specifying the reduced duty rate applicable to the goods. This instrument applies on a Commonwealth level and affects the rights of importers, potentially allowing them to apply for a refund of duties on goods imported since the TCO came into force, which is deemed to be the date the application was lodged. The application of the Act is not limited by jurisdictional boundaries and is applicable to any eligible goods imported into Australia.
Key Provisions
The key provisions of the Tariff Concession Instrument No. 0516886 involve the creation and implementation of a Tariff Concession Order (TCO) for certain regenerative thermal oxidizer parts under the Customs Act 1901 (section 269F). Pursuant to section 269C, a TCO application meets core criteria if no substitutable goods are produced in Australia on the day the application is lodged (section 269P(3)). In this case, the CEO determined that no such goods were produced, leading to the issuance of TCO No. 0516886 on 3 March 2006, which specifies that the regenerative thermal oxidizer parts are subject to a 0% customs duty rate instead of the general 5% rate (section 269S(1)).
The obligations imposed by the Act require the CEO to assess the validity of the TCO application and determine whether it meets the core criteria set out in section 269C. This involves ensuring that no substitutable goods are being produced in Australia on the date the application is lodged. Additionally, the CEO must publish a notice in the Gazette, inviting any interested parties to submit their views on the proposed TCO (subsection 269K(1)). While Bluescope Steel Ltd applied for the TCO, the CEO did not receive any submissions in response to the Gazette notice.
Failure to comply with the requirements of the Customs Act 1901 may result in civil or criminal penalties. For instance, providing false or misleading information in an application for a TCO could lead to fines or imprisonment under the general provisions of the Act. While the specific penalties for breach are not detailed in the explanatory statement, they would be determined based on the general penalties applicable under the Customs Act 1901 for similar offences. Importers who benefit from the TCO may also face repercussions if they do not comply with other customs regulations, such as duty refunds or incorrect classification of goods.