EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0601596
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 pickle line tank parts on 29 December 2005.
Instrument
TCO No 0601596 was made on 17 March 2006. It declares that those certain pickle line tank 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. 0601596 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. 0601596, enacted under the Customs Act 1901, addresses the need for tariff concessions on specific goods by allowing the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs). The instrument was introduced to facilitate lower customs duty rates for goods that are not substitutable by Australian-produced goods, thereby promoting the importation of these goods. This mechanism ensures that Australian consumers and businesses can benefit from competitively priced imported goods where no suitable domestic alternatives exist. The instrument was enacted by the relevant authority under the Customs Act, aiming to provide relief to importers by potentially reducing or eliminating customs duties on specified goods. The instrument's application in this instance, concerning Bluescope Steel Ltd’s pickle line tank parts, exemplifies the policy objective of supporting industries by reducing the cost of essential imported components.
Scope and Application
The Tariff Concession Instrument No. 0601596 under the Customs Act 1901 applies to the goods specified in the application, in this case certain pickle line tank parts, and is aimed at providing relief from customs duties for these goods. This instrument is applicable to the entities that import these goods, allowing them to benefit from the reduced duty rate as outlined in the instrument. The application of this particular instrument is confined to the specific goods mentioned in the application, which in this instance are pickle line tank parts, and is subject to the condition that no substitutable goods are produced in Australia in the ordinary course of business. The instrument operates within the Commonwealth jurisdiction and its application is limited to the particular goods specified in the Tariff Concession Order, which is tied to item 50 of Schedule 4 to the Customs Tariff Act 1995. The instrument's effect is limited to the goods to which the prescribed rate of duty applies, and it does not impose any liabilities on persons other than the Commonwealth. The instrument also ensures that the rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0601596 (TCO No. 0601596) under the Customs Act 1901 (sections 269C, 269P, and 269S) establish the framework for applying tariff concessions on specific goods. Section 269C outlines the core criteria that must be met for an application to be considered valid, which primarily involves ensuring that no substitutable goods are being produced in Australia. Section 269P(3) mandates that if these criteria are met, the Chief Executive Officer of Customs (CEO) must issue a written order that specifies the lower tariff rate for the goods in question. Section 269S determines the effective date of the TCO, which is taken to be the date the application was lodged.
The Act imposes several obligations on the parties involved. The CEO must ensure that applications for tariff concession orders are assessed against the criteria specified in section 269C. Once an application is deemed to meet these criteria, the CEO is required to issue a TCO as per section 269P. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who might have reasons why the TCO should not proceed (subsection 269K(1)). Importers who benefit from the TCO can apply for a refund of duties paid on goods imported since the effective date of the TCO under paragraph 126(1)(r) of the Regulations.
Failure to comply with the requirements of the Customs Act 1901 can lead to various consequences. While specific penalties are not detailed in the explanatory statement, breaches of customs regulations generally can result in civil or criminal penalties. For instance, knowingly making a false statement or representation in a customs document can result in fines or imprisonment, depending on the severity of the offence. In addition, any penalties related to the misuse of a tariff concession order would likely be pursued under the general provisions of the Customs Act and associated regulations. The specific penalties for such breaches would be determined based on the nature and extent of the violation.