EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0603137
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 duplex oil filters on 1 Feburary 2006.
Instrument
TCO No 0603137 was made on 7 April 2006. It declares that those certain duplex oil 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. 0603137 is taken to have come into force on 1 Feburary 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 Parliament of Australia, provides for the regulation of imports and exports through the imposition of customs duties. To address the economic impact of certain imports, Part XVA of the Act allows for Tariff Concession Orders (TCOs) to be made by the Chief Executive Officer of Customs. The 2006 instrument, Tariff Concession Instrument No. 0603137, was introduced to provide tariff concessions on certain duplex oil filters, as applied for by Bluescope Steel Ltd. The policy objective behind this concession is to facilitate the import of these goods by granting them a lower rate of customs duty, thereby potentially lowering the cost of these imports and benefiting the importers who can apply for a refund of duty on goods imported since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0603137, made under section 269F of the Customs Act 1901, applies to specific goods, in this instance, certain duplex oil filters, and is directed at entities or individuals seeking a reduction in customs duty for these goods. The Act allows the Chief Executive Officer of Customs to make a Tariff Concession Order (TCO) if certain criteria are met, primarily that no substitutable goods are produced in Australia. The application of this Act is national in scope, operating under the Commonwealth jurisdiction. Notably, this TCO does not disadvantage any person or impose liabilities on any person other than the Commonwealth, and it does not affect the rights of individuals as at the date of registration in respect of anything done or omitted before the registration date. There are exclusions as per section 269SJ of the Act, which outlines goods that cannot be subject to a TCO. The instrument extends its application through subordinate instruments, which detail the specific goods and the conditions under which the concession applies.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0603137 under the Customs Act 1901 (the Act) involve the application and approval process for Tariff Concession Orders (TCOs). Specifically, Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. Section 269C stipulates that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, they must make a written order declaring that the goods in question are subject to a prescribed tariff item (Section 269P(3)). For the specific TCO No. 0603137, it was made on 7 April 2006 and declared that certain duplex oil filters are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free instead of the general rate of 5%.
The Act imposes several obligations and requirements on the parties involved. Firstly, an applicant must ensure their application for a TCO is not in respect of goods specified in Section 269SJ of the Act, which outlines those goods that cannot be subject to a TCO. The CEO must then assess whether the application meets the core criteria, which involves verifying that no substitutable goods were produced in Australia on the day of the application. If the CEO is satisfied with the application, they must issue a written TCO (Section 269P(3)). Additionally, as per Section 269K(1), the CEO is required to publish a notice in the Gazette inviting any person who believes the TCO should not be made to lodge a submission.
In terms of offences, penalties, or consequences for breach, the Act does not explicitly outline specific criminal or civil penalties for non-compliance with the TCO provisions. However, the process for issuing a TCO is strictly regulated to ensure that tariff concessions are granted only under specific, statutorily defined circumstances. Non-compliance by the CEO or by an applicant could potentially lead to legal challenges or administrative penalties if the process is not followed correctly. It is also important to note that the TCO does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on any person, as outlined in the explanatory statement. This means that while the TCO benefits importers by allowing them to apply for a refund of duty, it does not impose any adverse effects on other stakeholders.