EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0603464
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 thermal protection platforms on 3 February 2006.
Instrument
TCO No 0603464 was made on 18 April 2006. It declares that those certain thermal protection platforms 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. 0603464 is taken to have come into force on 3 February 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, provides a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders offer reduced rates of customs duty on specific goods, provided that certain criteria are met. One such criterion is that no substitutable goods should be produced in Australia at the time the application is lodged. The Tariff Concession Instrument No. 0603464, enacted in 2006, was introduced to address a specific need identified by Bluescope Steel Ltd for a tariff concession on certain thermal protection platforms. This instrument was made to provide a zero percent duty rate on these platforms, effective from the date the application was lodged, 3 February 2006, subject to no objections being raised during the consultation period. The objective was to ensure that no Australian businesses were disadvantaged and to provide a competitive advantage to importers of these goods by potentially allowing them to apply for duty refunds on imports made since the effective date of the TCO.
Scope and Application
The Tariff Concession Order No. 0603464 under Part XVA of the Customs Act 1901 applies to the reduction of customs duty rates on certain thermal protection platforms, which Bluescope Steel Ltd applied for on 3 February 2006. The application was processed by the Chief Executive Officer of Customs, who determined that no substitutable goods were produced in Australia on the date the application was lodged, thereby meeting the core criteria set out in section 269C of the Act. Consequently, the CEO issued a written order, a Tariff Concession Order, on 18 April 2006, which reduced the duty rate from the general rate of 5% to 0% as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995. This concession is applicable to the goods in question, providing a benefit to importers by allowing them to apply for a refund of duty on goods imported since the date the order is taken to have come into force. The order does not impose any liabilities on any person other than the Commonwealth nor does it affect the rights of any person as at the date of registration.
Key Provisions
The primary sections relevant to the Tariff Concession Order (TCO) No. 0603464 are sections 269F, 269C, 269P, and 269K of the Customs Act 1901. Section 269F allows an individual to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of certain goods. If the CEO determines that the application meets the core criteria specified in section 269C, they must issue a written order that specifies the goods to which a particular item in Schedule 4 of the Customs Tariff Act 1995 applies (section 269P(3)). Section 269K mandates that the CEO must publish a notice in the Gazette, inviting any person who believes a TCO should not be made to submit their reasons to the CEO.
Under the Customs Act, the CEO is obligated to review TCO applications to determine whether they meet the core criteria. This involves assessing whether the goods in question are not produced in Australia in the ordinary course of business and whether there are no substitutable goods available that could be used instead. For the application to qualify, it must be shown that no such goods are produced domestically and can serve the same use as the goods in the application. Additionally, the CEO must publish a notice in the Gazette and consider any submissions received in response to this notice before deciding whether to issue a TCO.
The obligations placed on the CEO include conducting a thorough assessment of the TCO application to ensure it meets the statutory criteria and considering any submissions made by interested parties. Once satisfied that the application meets the core criteria, the CEO must issue a written TCO specifying the applicable tariff item. Furthermore, the CEO must ensure that any rights of third parties are not adversely affected by the issuance of the TCO, and that the TCO does not impose any liabilities on persons other than the Commonwealth.
Breaching the requirements of the Customs Act or the terms of a TCO can lead to various civil and criminal consequences. While specific penalties are not outlined in the explanatory statement, breaches of the Customs Act generally may result in fines and, in severe cases, imprisonment. For instance, knowingly making a false statement in a TCO application could lead to criminal charges. Additionally, failure to comply with the terms of a TCO might result in the loss of any tariff benefits granted by the TCO, along with potential financial penalties for any duties owed on the imported goods. The exact penalties would depend on the nature and severity of the breach.