EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0601824
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 tank parts on 5 January 2006.
Instrument
TCO No 0601824 was made on 17 March 2006. It declares that those certain steel strip 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. 0601824 is taken to have come into force on 5 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 Customs Act 1901 was enacted by the Parliament of Australia to facilitate the regulation and control of goods entering and exiting the country, ensuring the proper collection of customs duties and taxes. The introduction of Tariff Concession Orders (TCOs) under Part XVA of the Act aims to provide relief from customs duties for certain goods where there are no substitutable goods produced in Australia. This is to encourage the importation of goods that would otherwise not be economically viable if subject to full customs duty. Instrument TCO No. 0601824, made on 17 March 2006, applies to certain steel strip pickle line tank parts, granting them a zero percent duty rate, down from the general rate of five percent, upon the application of Bluescope Steel Ltd. The process for granting such concessions involves a rigorous assessment by the Chief Executive Officer of Customs to ensure that the application meets the core criteria, including the absence of substitutable goods produced in Australia.
Scope and Application
The Tariff Concession Instrument No. 0601824 applies to certain steel strip pickle line tank parts as specified by Bluescope Steel Ltd, following their application under the Customs Act 1901. This legislation pertains to the Commonwealth jurisdiction and applies to entities seeking tariff concessions on imported goods. The instrument is applicable to goods that are not produced in Australia and for which no substitutable goods are produced in the ordinary course of business. The primary purpose is to provide a lower rate of customs duty on these specific goods, as determined by the Chief Executive Officer of Customs. The concessions are effective from the date the application was lodged, which in this case was 5 January 2006. The instrument does not disadvantage any person by imposing liabilities or affecting rights as at the date of registration. Importers of the specified goods can benefit from the concessions by applying for a refund of duty paid on imports since the effective date of the Tariff Concession Order.
Key Provisions
The key operative sections of this legislation concern the application and determination of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows any person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of certain goods (s269F). If the CEO is satisfied that the application is valid, they must then decide whether it meets the core criteria outlined in section 269C of the Act. Section 269C specifies that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for terms such as "goods produced in Australia", "ordinary course of business" and "substitutable goods" are provided in sections 269D, 269E and 269P(3) respectively. If the CEO is satisfied that the application meets the core criteria, they must then make a written TCO order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (s269P(3)).
The obligations imposed on the parties governed by this Act include the requirement for any person seeking a TCO to apply to the CEO in accordance with section 269F. The CEO, upon receiving a valid application, must assess whether the application meets the core criteria, including whether any substitutable goods were produced in Australia at the time of the application (s269C). If the application meets these criteria, the CEO must make a written TCO order that specifies the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applicable to the goods (s269P(3)). Additionally, the CEO is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested parties to submit objections to the TCO (s269K(1)).
Failure to comply with the requirements of the Customs Act 1901 or the terms of a TCO may result in various civil or criminal consequences. Although specific offences and penalties are not detailed in this explanatory statement, breaches of customs legislation generally can lead to significant penalties. For example, under section 245 of the Customs Act 1901, a person who contravenes any provision of the Act may be liable to a fine of up to $22,200 or imprisonment for up to two years, or both. Furthermore, if the breach involves fraud or dishonesty, the penalties can be more severe, potentially including fines of up to $222,000 or imprisonment for up to 10 years, or both. The consequences for non-compliance can therefore be substantial, highlighting the importance of adhering to the legislative requirements.