EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0603672
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 three phase AC induction motors on 10 February 2006.
Instrument
TCO No 0603672 was made on 21 April 2006. It declares that those certain three phase AC induction motors 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. 0603672 is taken to have come into force on 10 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 Tariff Concession Instrument No. 0603672 was enacted under the Customs Act 1901 to address the issue of facilitating the importation of specific goods by providing tariff concessions. This instrument, issued by the Chief Executive Officer of Customs, aims to lower the rate of customs duty on certain goods, in this case, three-phase AC induction motors, by declaring them exempt from duty if no substitutable goods are produced in Australia. The instrument was introduced to support the policy objective of encouraging the importation of goods that are not locally produced, thereby benefiting importers by potentially reducing their customs duty liabilities and allowing them to seek refunds for duties paid on imports since the TCO came into effect. The instrument came into force on the date the application was lodged, 10 February 2006, and did not affect any pre-existing rights or impose liabilities on any party other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0603672, pursuant to Part XVA of the Customs Act 1901, applies to any entity seeking tariff concessions on specific goods imported into Australia. This legislation is relevant to entities such as Bluescope Steel Ltd, which applied for tariff concessions on certain three phase AC induction motors. The application and subsequent approval of a Tariff Concession Order (TCO) by the Chief Executive Officer of Customs (CEO) allows for the reduction of customs duty on specified goods to zero, provided that no substitutable goods are produced in Australia and certain criteria are met. The geographic and jurisdictional reach of this Act is national, as it pertains to the importation of goods into Australia. The Act does not specify exclusions or thresholds but relies on the core criteria outlined in section 269C of the Customs Act 1901. The instrument extends or restricts application through subordinate instruments, particularly the Customs Tariff Act 1995, which details the specific tariff items applicable to the goods in question. The TCO provides relief to importers by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO, which, in this case, is 10 February 2006.
Key Provisions
The Tariff Concession Instrument No. 0603672 under the Customs Act 1901 (section 269F) outlines the process for applying for and granting tariff concession orders (TCOs) for specific goods. In this case, the instrument addresses an application by Bluescope Steel Ltd for a TCO on certain three phase AC induction motors, which are declared to be subject to item 50 of Schedule 4 to the Customs Tariff Act 1995. Section 269C of the Act specifies that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the date the application was lodged. The Chief Executive Officer of Customs (CEO) must then issue a written TCO if satisfied with the application, as was done on 21 April 2006. This TCO resulted in the three phase AC induction motors being subject to a duty rate of free, down from the general rate of 5%.
The obligations under this Act primarily fall on the CEO, who must evaluate the application and decide whether it meets the criteria specified in sections 269C, 269D, and 269E. The CEO must also ensure that any substitutable goods are not being produced in Australia. Once the CEO is satisfied, they must issue the TCO, as outlined in section 269P(3) of the Act. Additionally, the CEO is required to publish a notice in the Gazette, inviting submissions from any person who might have reasons why the TCO should not be made (subsection 269K(1)).
Failure to comply with the provisions of the Customs Act 1901 can result in legal consequences. The Act does not explicitly detail specific offences or penalties for non-compliance with TCOs. However, general penalties for breaches of the Customs Act can include fines and imprisonment. For instance, section 224 of the Act provides for penalties for offences related to the importation and exportation of goods, which may include substantial fines and imprisonment for serious breaches. The exact penalties depend on the severity of the breach and the specific provisions of the Customs Act and related regulations.