EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0603551
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 centrifugal pumps on 9 February 2006.
Instrument
TCO No 0603551 was made on 18 April 2006. It declares that those certain centrifugal pumps 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. 0603551 is taken to have come into force on 9 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, introduced a scheme for Tariff Concession Orders (TCOs) to provide relief from customs duty on certain goods. Specifically, the Act, through Part XVA, empowers the Chief Executive Officer of Customs to grant TCOs that apply a lower rate of customs duty to goods that meet specific criteria. This legislative framework was designed to address the problem of ensuring that Australian businesses remain competitive in the global market by potentially lowering the cost of importing certain goods. In the case of Tariff Concession Instrument No. 0603551, the policy objective was realised when the CEO granted a concession for certain centrifugal pumps, resulting in a reduction of duty from 5% to 0%, thereby benefitting importers of these goods. The instrument was introduced without any submissions against it, indicating a smooth acceptance of the tariff concession by stakeholders.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines the process for Tariff Concession Orders (TCOs) which can be applied for by any person seeking a lower rate of customs duty on specific goods. The Act applies to any entity or individual who wishes to apply for a tariff concession on goods, provided the goods are not specified in section 269SJ as those ineligible for a TCO. The primary criterion for a TCO, as stipulated in section 269C, is that no substitutable goods must be produced in Australia in the ordinary course of business on the day the application is lodged. The geographic reach of this legislation is national, administered by the Chief Executive Officer of Customs, who has the authority to make TCOs under section 269F. The TCO No. 0603551, concerning certain centrifugal pumps, was made effective from 9 February 2006, the date the application was lodged, and no submissions were received against it, as per the consultation process outlined in the Act. This TCO benefits importers by reducing the duty rate from 5% to 0% on the specified goods, without affecting any pre-existing rights or imposing new liabilities on individuals or entities.
Key Provisions
The Tariff Concession Instrument No. 0603551, made under the Customs Act 1901, primarily addresses the application of tariff concessions to specific goods, in this case, certain centrifugal pumps. Section 269F (1) of the Act allows any person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). If the CEO determines that the application is valid and meets the core criteria outlined in section 269C, they must issue a TCO, as seen in the case of Bluescope Steel Ltd's application for centrifugal pumps on 9 February 2006. This order, effective from the date of application, grants a tariff concession, reducing the duty from 5% to 0%, as stated in the order.
The Act imposes certain obligations on the parties involved in the process of obtaining a TCO. Section 269K(1) mandates that the CEO must publish a notice in the Gazette, inviting any interested party to submit objections if they believe the TCO should not proceed. This ensures transparency and allows for stakeholder engagement in the decision-making process. In this instance, no submissions were received, facilitating the CEO's decision to grant the TCO. Additionally, section 269S(1) specifies that the TCO comes into force on the date the application is lodged, which in this case is 9 February 2006.
Non-compliance with the provisions of the Customs Act 1901 can lead to significant legal consequences. While specific offences and penalties related to TCO applications are not detailed in the explanatory statement, breaches of the Act generally may result in civil or criminal penalties, depending on the severity of the violation. The maximum penalties could include fines or imprisonment, reflecting the importance of adhering to the regulatory framework. It is essential for applicants and the CEO to navigate these provisions carefully to avoid any legal repercussions.