EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0601593
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 walking beam furnace induction fan silencers on 29 December 2005.
Instrument
TCO No 0601593 was made on 17 March 2006. It declares that those certain walking beam furnace induction fan silencers 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. 0601593 is taken to have come into force on 29 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, enacted by the Commonwealth Parliament, provides a framework for the regulation of customs duties, including the establishment of a scheme for Tariff Concession Orders (TCOs) under Part XVA. This scheme was introduced to address the need for tariff relief on certain goods that are not produced in Australia and have no substitutable alternatives. The primary objective of the Act, as evidenced in the explanatory statement for Tariff Concession Instrument No. 0601593, is to facilitate the reduction or elimination of customs duties on specific goods, thereby promoting economic efficiency and competitiveness for Australian importers. In this instance, the Instrument was made in response to an application by Bluescope Steel Limited for tariff concessions on certain walking beam furnace induction fan silencers, resulting in a reduction of the duty rate from 5% to free. This legislative measure ensures that the rights of importers are protected and beneficially affected without imposing any liabilities on non-Commonwealth persons.
Scope and Application
The Customs Act 1901, specifically Part XVA, outlines the conditions under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer (CEO) of Customs, impacting the rate of customs duty applied to certain goods. The Act applies to entities such as Bluescope Steel Limited, which can apply for a TCO if the goods in question are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. For an application to meet the core criteria, it must be established that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The CEO must then make a written order if satisfied that the application meets these criteria, as was the case with TCO No. 0601593 concerning certain walking beam furnace induction fan silencers. The geographic and jurisdictional reach of this Act is national, with the TCOs being applicable throughout Australia and extending to the federal level. The Act allows for the extension or restriction of its application through subordinate instruments, ensuring that the regulations remain adaptable to specific needs and circumstances.
Key Provisions
The main operative sections of this legislation, particularly section 269F, establish the process for applying for a Tariff Concession Order (TCO) under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of specific goods, provided the application does not pertain to goods listed in section 269SJ, which are ineligible for TCOs. If the CEO determines that the application does not involve such ineligible goods, they must assess whether it meets the core criteria specified in section 269C. This section stipulates that an application meets the criteria if, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business. To further clarify, section 269D defines 'goods produced in Australia,' section 269E defines 'ordinary course of business,' and section 269B specifies that 'substitutable goods' are those produced in Australia and capable of being used for the same purpose as the goods in question.
The obligations and requirements imposed by this Act on the parties involved, particularly the CEO, are substantial. Section 269K(1) mandates that once the CEO accepts a TCO application as valid, they must publish a notice in the Gazette. This notice includes an invitation for any person who believes the TCO should not be granted to submit their reasons to the CEO. Additionally, the CEO must decide whether the application meets the core criteria by ensuring that no substitutable goods were produced in Australia on the application date, as outlined in section 269C. The CEO is also required to make a written TCO if they are satisfied that the application meets the criteria, as specified in section 269P(3).
The Act outlines specific offences, penalties, and consequences for breaches. While the explanatory statement does not detail specific penalties for non-compliance with the Act, it is essential to note that the Customs Act 1901 includes provisions for penalties related to incorrect declarations, fraudulent activities, and other breaches. For instance, section 269 of the Act, which governs the overall framework for TCOs, may include penalties for misrepresentation or failure to comply with the conditions set forth in the TCO. Although the maximum penalties are not explicitly stated in this explanatory statement, they are typically found within the broader Customs Act 1901 and related regulations, which may include fines or imprisonment for serious violations.