EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0604727
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 applied for a TCO in respect of certain carryover conveyors on 3 March 2006.
Instrument
TCO No 0604727 was made on 12 May 2006. It declares that those certain carryover conveyors 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. 0604727 is taken to have come into force on 3 March 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 was enacted by the Australian Parliament to manage the regulation and control of customs and excise duties. One of the mechanisms introduced to address specific trade needs is the Tariff Concession Order (TCO) scheme, which allows for reduced customs duty rates on certain imported goods. This scheme helps balance the competitive environment for Australian businesses and ensures that certain critical goods are accessible at a lower cost, facilitating trade and economic growth. The Tariff Concession Instrument No. 0604727, made on 12 May 2006, applies this principle to certain carryover conveyors, granting them a concession from the usual 5% duty rate to a zero duty rate, thus reflecting the policy objective of promoting fair trade practices and supporting industrial efficiency. The instrument was introduced without any public submissions opposing the concession, highlighting its alignment with broader trade policy objectives.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines the framework through which Tariff Concession Orders (TCOs) are established, enabling a lower rate of customs duty for certain goods. This provision is administered by the Chief Executive Officer of Customs, who is mandated to consider applications for TCOs, provided that the goods in question are not those listed in section 269SJ of the Act, which excludes certain goods from TCO eligibility. An application for a TCO meets the core criteria if no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged, as per sections 269C and 269F of the Act. This instrument is designed to benefit industries by reducing the duty burden on specific imported goods, thereby promoting trade. The application of TCOs extends across the Commonwealth of Australia, impacting importers of the specified goods by potentially reducing their duty liabilities. However, the application of the TCO does not retroactively affect any existing rights or impose liabilities on persons other than the Commonwealth for actions taken prior to the TCO's effective date.
Key Provisions
The main operative sections of this legislation (sections 269C, 269F, and 269P) establish a framework for applying for and obtaining Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows for the application of a TCO by any person, while section 269C stipulates that the application will meet the core criteria if no substitutable goods are produced in Australia on the day the application was lodged. If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, section 269P(3) requires the CEO to issue a written TCO declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. The TCO in question, Instrument No. 0604727, was issued on 12 May 2006 and applies to certain carryover conveyors, which now have a duty rate of free instead of the general rate of 5%.
Under this legislation, the CEO of Customs is obligated to assess TCO applications against the core criteria outlined in section 269C. The CEO must ensure that no substitutable goods are produced in Australia when the application is lodged. Furthermore, once a TCO application is accepted as valid, the CEO is required by section 269K(1) to publish a notice in the Gazette inviting any interested parties to submit any objections to the TCO. The CEO must also ensure that the TCO does not disadvantage any person or impose liabilities on them in respect of anything done or omitted to be done before the date of registration.
The Customs Act 1901 imposes several consequences for breaches of the provisions of a TCO. While the explanatory statement does not explicitly state any offences, penalties, or civil/criminal consequences for breach of a TCO, it is likely that breaches of the Customs Act or the associated regulations would be subject to the general penalties provided within those Acts. These could include fines, imprisonment, or other penalties as prescribed by the relevant legislation. For example, section 126(1)(r) of the Customs Regulations 1993 allows importers to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. However, any improper claims for refunds or other breaches of the Customs Act or regulations could lead to criminal or civil consequences.