EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0602455
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 electro magnetic coolant filters on 17 January 2006.
Instrument
TCO No 0602455 was made on 10 April 2006. It declares that those certain electro magnetic coolant filters 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. 0602455 is taken to have come into force on 17 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. 0602455 was enacted in 2006 under the Customs Act 1901, aiming to address the need for tariff concessions on specific goods not produced domestically. This instrument was introduced to facilitate the application process for Tariff Concession Orders (TCOs), ensuring that goods which are not substitutable by Australian-made products can receive preferential customs duty treatment. The instrument was enacted by the Chief Executive Officer of Customs following an application by Bluescope Steel Ltd for tariff concessions on certain electromagnetic coolant filters, which was approved as no substitutable goods were produced in Australia at the time. The policy objective is to support the import of goods that are not domestically produced, thereby benefiting importers and potentially stimulating demand for such goods.
This instrument was published in the Gazette to invite submissions from interested parties, though none were received. The TCO came into force on the date the application was lodged, 17 January 2006, and it does not affect the rights of any person as at the date of registration or impose liabilities for actions taken before the registration date. Importers of the specified goods can apply for a refund of duty under the Customs Regulations 1993.
Scope and Application
The Customs Act 1901, specifically Part XVA, facilitates the issuance of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs, which apply lower rates of customs duty on certain goods. An application for a TCO can be made by any person, provided the goods in question are not those specified in section 269SJ of the Act that cannot be subject to a TCO. The CEO must assess whether the application meets the core criteria set out in sections 269C, 269D, and 269E of the Act, particularly ensuring that no substitutable goods were produced in Australia in the ordinary course of business. If satisfied, the CEO issues a written order as a TCO, effective from the date the application was lodged. The application process requires the CEO to publish a notice in the Gazette, inviting any interested parties to submit objections, though in the case of TCO No. 0602455 concerning certain electro magnetic coolant filters, no submissions were received. This TCO, which was made on 10 April 2006, applies to the specific goods listed and reduces the general duty rate of 5% to free, benefiting importers who can apply for duty refunds on goods imported since 17 January 2006.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0602455 under the Customs Act 1901 include sections 269C, 269F, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods, provided that the goods are not specified in section 269SJ, which outlines goods that cannot be subject to a TCO. Section 269C requires the CEO to determine if the application meets the core criteria, which is primarily that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, section 269P mandates the CEO to issue a written TCO, specifying the goods and the applicable rate of duty.
The obligations imposed by the Customs Act 1901 on the parties governed by the TCO include the responsibility of the applicant, in this case Bluescope Steel Ltd, to ensure that their application for a TCO is valid and meets the criteria set out in the Act. The CEO's obligations include assessing the validity of the application, considering any submissions received, and deciding whether to grant the TCO. The CEO is also required to publish a notice in the Gazette inviting any interested parties to submit objections or reasons why the TCO should not be granted. In this instance, no submissions were received.
Under the Customs Act 1901, any breaches of the conditions or requirements set out in a TCO may result in civil or criminal consequences. The penalties for non-compliance can include fines and imprisonment, depending on the severity and intent of the breach. While specific penalties are not detailed in the explanatory statement, general provisions within the Customs Act 1901 and associated regulations would apply, which typically include fines of up to several thousand Australian dollars and potential imprisonment for serious or repeated offences. The Act also allows for the recovery of any overpaid duties along with interest, ensuring compliance and adherence to the terms of the TCO.