EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0601594
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 steel strip pickle line tanks on 29 December 2005.
Instrument
TCO No 0601594 was made on 17 March 2006. It declares that those certain steel strip pickle line tanks 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. 0601594 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 Tariff Concession Instrument No. 0601594, enacted under the Customs Act 1901, was introduced to address the problem of potentially disadvantageous customs duty rates on specific goods that are not produced in Australia and are not listed as exempt under the Act. This instrument was designed to ensure that Australian importers are not unfairly burdened by high customs duties on goods for which no locally produced alternatives exist. The Customs Act 1901, enacted by the Australian Parliament, provides the legal framework for this scheme through which the Chief Executive Officer of Customs can issue Tariff Concession Orders (TCOs) to reduce customs duty on eligible imported goods. The policy objective behind this legislation is to promote fair trade practices by ensuring that the duty rates are not excessively high for goods that are not produced domestically, thereby supporting the competitive position of Australian importers in the global market.
Scope and Application
The Customs Act 1901 applies to individuals, entities, and industries involved in the importation of goods into Australia, specifically addressing the application of customs duties. The Act allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs), which provide for lower rates of customs duty on certain goods. A TCO can be applied for by any person under section 269F of the Act, provided the goods are not specified in section 269SJ as ineligible for tariff concessions. The application must meet the core criteria set out in sections 269C, 269B, and 269D of the Act, which involve the absence of substitutable goods produced in Australia in the ordinary course of business. The Act's application is national, with the CEO making decisions based on the eligibility of goods for tariff concessions. Exclusions apply to goods listed in section 269SJ, and the Act's scope may be further defined by subordinate instruments such as regulations and orders. The commencement of a TCO is effective from the date the application is lodged, and it does not retroactively affect the rights of any person or impose new liabilities.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0601594, under the Customs Act 1901, are sections 269C and 269P. Section 269C outlines the core criteria that an application for a Tariff Concession Order (TCO) must meet, specifically that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (s 269C). If the Chief Executive Officer (CEO) of Customs is satisfied that these criteria are met, section 269P(3) mandates that the CEO must make a written order (a TCO) (s 269P(3)). In this instance, the TCO applied to certain steel strip pickle line tanks, granting them a concessional rate of duty of 0% under item 50 of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed on parties by this legislation include the requirement for applicants to ensure that their applications for a TCO are made in accordance with the core criteria set out in section 269C. The CEO has the obligation to assess applications against these criteria and, if satisfied, to make the TCO. Additionally, the CEO must publish a notice in the Gazette inviting submissions from interested parties, as outlined in subsection 269K(1). In this case, the CEO did not receive any submissions in response to the notice.
Under this legislation, any failure to comply with the requirements for making a TCO or the obligations imposed on the CEO may result in civil or administrative consequences. However, the explanatory statement does not specify the exact nature of these consequences. It is important to note that the TCO does not affect the rights of any person, except the Commonwealth, as at the date of registration in a way that would disadvantage them or impose liabilities for actions taken before the registration date (s 269S(1)). Importers of the affected goods will have their rights beneficially affected, with the possibility of applying for a refund of duty on goods imported since the TCO is taken to have come into force (s 126(1)(r) of the Regulations).