EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0603136
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 clutch or brake magnetic powder on 30 January 2006.
Instrument
TCO No 0603136 was made on 7 April 2006. It declares that those certain clutch or brake magnetic powder 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. 0603136 is taken to have come into force on 30 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, enacted by the Australian Parliament, establishes a framework for the application and administration of customs duties. Specifically, Part XVA of the Act allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs), which apply a lower rate of customs duty to specified goods if certain criteria are met. This mechanism was introduced to facilitate the importation of goods that are not produced domestically or are not readily available in Australia, thus promoting fair trade practices and economic efficiency. Instrument No. 0603136, issued under this framework on 7 April 2006, granted Bluescope Steel Ltd a concession for certain clutch or brake magnetic powder, reducing the customs duty rate from 5% to 0%. This tariff concession was granted following a successful application and subsequent determination by the CEO that no substitutable goods were produced in Australia, satisfying the core criteria under the Act. The instrument came into force on the date of the application, 30 January 2006, without affecting any pre-existing rights or imposing new liabilities.
Scope and Application
The Tariff Concession Instrument No. 0603136 is a legislative instrument under the Customs Act 1901, which governs the process for making Tariff Concession Orders (TCOs). The Act applies to any person or entity that seeks to apply for a TCO for goods that are not specified in section 269SJ of the Act. The scope of the Act extends to the Chief Executive Officer of Customs, who is responsible for making the decision on whether an application meets the core criteria, as outlined in section 269C. The Act applies to the goods that are the subject of a TCO, and its jurisdiction is federal, operating under the Commonwealth of Australia. The Act does not apply to goods specified in section 269SJ, which are excluded from the tariff concession scheme. The instrument extends the application of the Act through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the rates of duty for the goods subject to a TCO. The instrument also provides for a refund of duty on goods imported since the TCO came into force, which is beneficial to importers.
Key Provisions
The primary sections relevant to the Tariff Concession Order (TCO) No. 0603136 under the Customs Act 1901 include section 269F, which outlines the application process for a TCO, and section 269C, which sets the core criteria for such an application to be considered valid. Section 269F allows any person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. Section 269C stipulates that for a TCO application to meet the core criteria, it must be established that no substitutable goods were produced in Australia on the day the application was lodged.
The obligations imposed by the Act on the CEO include the requirement to assess the validity of a TCO application, as per section 269F, and to ensure that it meets the core criteria as outlined in section 269C. If satisfied, the CEO must make a written order declaring the goods subject to a lower rate of customs duty, as per section 269P(3). Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit objections to the TCO application. The CEO must also ensure that the rights of persons, excluding the Commonwealth, are not adversely affected by the TCO as per subsection 269S(1).
In terms of penalties and consequences for breach, the Act does not explicitly state penalties for non-compliance with the TCO provisions. However, any breach of the Customs Act 1901 or associated regulations could lead to civil or criminal penalties as provided by other sections of the Act. The severity of penalties would depend on the nature and extent of the breach, potentially including fines or imprisonment. Given that the TCO in question aims to provide tariff concessions without imposing new liabilities, the focus remains on ensuring compliance with the procedural and substantive requirements set out in the Act.