EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0603730
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 convertors and/or invertors on 14 February 2006.
Instrument
TCO No 0603730 was made on 28 April 2006. It declares that those certain convertors and/or invertors 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. 0603730 is taken to have come into force on 14 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. 0603730, enacted under the Customs Act 1901, addresses the need for the Chief Executive Officer of Customs (CEO) to implement tariff concessions on specific goods to promote fair trade practices and economic efficiency. This instrument was introduced to facilitate a streamlined process for businesses to apply for lower customs duty rates on imported goods, provided certain conditions are met. The CEO evaluates applications against the core criteria, ensuring that no substitutable goods are produced domestically in the ordinary course of business. This legislative instrument aims to encourage trade by reducing the financial burden on businesses that import goods not produced locally, thus aligning with the policy objective of fostering a competitive and efficient market.
The instrument was enacted by the CEO under the authority conferred by the Customs Act 1901, ensuring that the process is both transparent and consultative. Bluescope Steel Ltd's application for tariff concessions on certain converters and/or inverters was approved following a determination that no substitutable goods were produced in Australia, resulting in a zero percent duty rate for these goods. This decision aligns with the broader policy goal of supporting Australian industries by ensuring that tariff concessions are granted judiciously, thereby maintaining a balanced trade environment. The instrument took effect from the date of application, 14 February 2006, without adversely affecting the rights of any party or imposing new liabilities.
Scope and Application
The Tariff Concession Instrument No. 0603730 applies to specific goods, in this case certain convertors and invertors, as identified by Bluescope Steel Ltd, which sought a tariff concession from the Chief Executive Officer of Customs (CEO) under Part XVA of the Customs Act 1901. The application of this Instrument is contingent on the CEO's determination that no substitutable goods are produced in Australia and that the core criteria are met. The geographic reach of this legislation is inherently tied to the Customs Act 1901, which is a Commonwealth Act, thereby affecting entities and individuals involved in the importation of these goods across Australia. The scope of the Instrument is limited to the specific goods identified in the application and does not extend to any other goods unless explicitly included in a subsequent Tariff Concession Order. Exclusions from this Instrument include goods specified in section 269SJ of the Customs Act 1901, which are those that cannot be subject to a tariff concession. The commencement of this Instrument is retroactive to the date of the application, 14 February 2006, and it does not impose any liabilities on any person or disadvantage any person's rights as at the date of registration.
Key Provisions
The Tariff Concession Instrument No. 0603730, under the Customs Act 1901, primarily concerns the establishment of Tariff Concession Orders (TCOs) for specific goods, in this case, certain convertors and/or inverters. Section 269F of the Act enables an application for a TCO, which is processed by the Chief Executive Officer of Customs (CEO). If the application complies with the criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia on the date of application, the CEO must make the order. Section 269P(3) mandates that the CEO must issue a written order if satisfied that the application meets the core criteria, as was the case with Bluescope Steel Ltd's application.
The obligations imposed by the Act on parties, including Bluescope Steel Ltd, include the requirement to apply for a TCO in accordance with section 269F and to ensure the application meets the criteria set out in section 269C. The CEO's obligations involve assessing the validity of the application, publishing a notice in the Gazette inviting submissions from interested parties under subsection 269K(1), and making a decision on the application. Once the TCO is made, section 269S(1) specifies that it comes into effect on the date the application was lodged, which in this instance was 14 February 2006.
Failure to comply with the requirements of the Act or the terms of a TCO can result in various legal consequences. Under the Customs Act 1901, breaches of the Act or the TCO may lead to civil or criminal penalties. The specific penalties depend on the nature and severity of the breach, but they can include fines and imprisonment. The Customs Act 1901 and the Customs Tariff Act 1995 provide for these penalties, with the exact amounts and conditions specified in relevant sections and schedules. However, the explanatory statement does not detail the specific penalties for breaches in this instance.