EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0601825
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 steel strip pickle line tank parts on 05 January 2006.
Instrument
TCO No 0601825 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 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. 0601825 is taken to have come into force on 05 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. 0601825, made under the Customs Act 1901, addresses the need to facilitate tariff concessions for certain goods, ensuring they attract a lower rate of customs duty. Enacted by the Parliament of Australia, this instrument was introduced to streamline the process through which businesses can apply for tariff concessions on specific imported goods, provided no substitutable goods are produced domestically. The primary objective is to promote fair trade practices by offering reduced customs duties on goods that are not readily available in the Australian market, thereby encouraging competition and economic efficiency. This legislative measure ensures that businesses can benefit from lower duty rates on imported goods, fostering a more competitive and economically vibrant environment.
Scope and Application
The Customs Act 1901, specifically under Part XVA, authorises the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) which apply a lower rate of customs duty to certain goods. This legislative framework enables businesses to apply for tariff concessions where the goods in question are not produced in Australia in the ordinary course of business and there are no substitutable goods available domestically. The application process requires meeting core criteria, such as the absence of domestic production of substitutable goods, as defined by the Act. Once the application is deemed to meet these criteria, a TCO is issued, effectively reducing the customs duty on specified goods. For instance, TCO No. 0601825 applies to certain steel strip pickle line tank parts, setting the duty rate to free, down from the general rate of 5%. The Act mandates that the CEO must invite public submissions upon accepting an application as valid, although in this case, no submissions were received. The TCO takes effect from the date of the application, providing immediate benefits to importers who can apply for duty refunds on goods imported since the effective date of the concession. Importantly, the TCO does not disadvantage any person by affecting their rights as they stood on the date of registration nor impose any new liabilities.
Key Provisions
The main operative sections of this legislation pertain to the process and criteria for applying for and granting Tariff Concession Orders (TCOs) under the Customs Act 1901. Specifically, section 269F allows a person to apply for a TCO in respect of goods, while section 269C stipulates 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. If the Chief Executive Officer of Customs (CEO) is satisfied that the application meets these criteria, a written order (TCO) must be made under section 269P(3).
Under the Act, the CEO is obligated to assess whether a TCO application meets the core criteria, which involves determining whether substitutable goods were produced in Australia on the day the application was lodged. If the application is deemed valid, the CEO must make a TCO as specified in section 269P(3). Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission. The CEO is also required to consider any submissions received and decide on the TCO accordingly. The TCO comes into effect on the day the application for the TCO was lodged as per section 269S(1).
The Act imposes several requirements on the parties involved in the TCO process. The applicant must ensure that the TCO application is valid and meets the core criteria specified in section 269C. The CEO must rigorously evaluate the application, consider any submissions received, and decide whether to make a TCO. Furthermore, under section 269D, the CEO must also ensure that the goods subject to the TCO are not specified in section 269SJ, which outlines the goods that cannot be subject to a TCO. The CEO’s decision must be documented and communicated through a written order if the criteria are met.
The legislation also outlines potential consequences for non-compliance or misuse of the TCO provisions. While specific offences, penalties, or consequences are not detailed in the provided text, it is implied that failure to comply with the requirements or misuse of the TCO process could result in legal repercussions. For example, if an entity were to falsely claim that no substitutable goods were produced in Australia, it could potentially lead to civil or criminal penalties. However, the precise nature and extent of these penalties are not specified within the given excerpt of the Explanatory Statement.