EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0601823
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 6 January 2006.
Instrument
TCO No 0601823 was made on 24 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. 0601823 is taken to have come into force on 6 January 2006.
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. 0601823 was enacted in 2006 under the Customs Act 1901 to address the need for tariff concessions on specific goods, in this case pickle line tank parts, which Bluescope Steel Ltd applied for on 6 January 2006. This legislative instrument was introduced to facilitate the reduction of customs duties on certain goods, provided no substitutable goods were produced in Australia at the time of the application, thereby supporting the policy objective of encouraging imports and reducing costs for businesses importing these goods. The instrument was created by the Chief Executive Officer of Customs, following the core criteria set out in section 269C of the Act, which stipulates that no substitutable goods should be produced in Australia in the ordinary course of business on the day the application was lodged. The enactment of this instrument was designed to ensure that the rights of importers are beneficially affected, and it does not disadvantage or impose liabilities on any person other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0601823 under the Customs Act 1901 applies to goods specified in the instrument, in this case, certain pickle line tank parts, and is intended to benefit Bluescope Steel Ltd. The Act provides a framework for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) which grant lower rates of customs duty on specific goods. The application of the Act extends to any entity or individual involved in the importation of the goods subject to a TCO, with the primary focus being on the relief of customs duties for these goods. The geographic reach of the Act is national, as it applies across Australia. The Act excludes goods specified in section 269SJ of the Customs Act 1901, which are those that cannot be subject to a TCO. The Act's application can be extended or restricted through subordinate instruments, such as regulations that provide further detail on the application process and criteria.
Key Provisions
Section 269F of the Customs Act 1901 allows any person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). If the application is for goods not listed in section 269SJ, which includes those goods that cannot be subject to a TCO, the CEO must determine if the application meets the core criteria outlined in section 269C. This determination hinges on whether, on the date the application was submitted, no substitutable goods were produced in Australia in the ordinary course of business, with definitions provided in sections 269D and 269E for 'goods produced in Australia' and 'ordinary course of business', respectively. Additionally, 'substitutable goods' are defined in section 269F in relation to the goods in question.
The obligations imposed by the Act on the CEO are significant. Once satisfied that an application meets the core criteria, the CEO must issue a written TCO as per section 269P(3). This order declares the goods subject to the application as being subject to a specific item of Schedule 4 to the Customs Tariff Act 1995. Moreover, under section 269K(1), the CEO is mandated to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. This process ensures transparency and provides an opportunity for stakeholders to voice their concerns. In this instance, Bluescope Steel Ltd's application for a TCO regarding certain pickle line tank parts was made on 6 January 2006, and the CEO was satisfied that no substitutable goods were produced in Australia, leading to the issuance of TCO No. 0601823 on 24 March 2006.
The Act does not explicitly outline specific offences or penalties for breaching its provisions related to TCOs. However, it is implicit that any misuse or non-compliance with the terms of a TCO could lead to legal consequences under broader customs and trade laws. For example, any misrepresentation or fraud in the application process could result in civil or criminal penalties under the Customs Act 1901 or other related legislation. These penalties could include fines or imprisonment, depending on the severity of the breach and the discretion of the court. Furthermore, any failure to comply with the terms of the TCO could result in the imposition of full customs duty on the goods in question, thereby negating the benefits of the concession.