EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0604728
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 heaters on 3 March 2006.
Instrument
TCO No 0604728 was made on 5 May 2006. It declares that those certain heaters 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. 0604728 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, enacted by the Parliament of Australia, provides a framework for the administration of customs duties and the regulation of imports and exports. Part XVA of the Act introduces a scheme allowing for Tariff Concession Orders (TCOs) to be issued by the Chief Executive Officer of Customs, which reduce the customs duty on specified goods. The purpose of this legislative framework is to provide economic relief by lowering customs duties on goods for which no substitutable Australian-made alternatives exist. This mechanism supports industry competitiveness and consumer affordability by making imported goods more cost-effective. The explanatory statement for Tariff Concession Instrument No. 0604728, enacted in 2006, details the application process and the decision-making criteria for granting such concessions, ensuring that the benefits are appropriately targeted and transparently communicated.
Scope and Application
The Customs Act 1901, as outlined in Tariff Concession Instrument No. 0604728, applies to the process of applying for and granting Tariff Concession Orders (TCOs) for specific goods, facilitating a reduction in customs duty for those goods. The Act applies to persons or entities seeking tariff concessions, such as Bluescope Steel Ltd, who must demonstrate that the goods in question are not substitutable by products manufactured in Australia. The application process is governed by the core criteria set out in the Act, particularly sections 269C and 269SJ, which ensure that no equivalent goods are produced domestically and that the goods do not fall into categories ineligible for concessions. The instrument's geographic reach is national, as it pertains to the federal customs regime in Australia. There are no exclusions or exemptions specified in this particular TCO, and the threshold for concession is determined by the absence of substitutable goods produced in Australia. The Act allows for the extension or restriction of its application through subordinate instruments, which may further define terms or criteria for specific cases.
Key Provisions
The main sections of the Tariff Concession Instrument No. 0604728, under the Customs Act 1901, involve the granting of tariff concessions for specific goods. Section 269F allows an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). Section 269C sets out the core criteria that must be met for the CEO to consider making a TCO, primarily focusing on whether substitutable goods are produced in Australia. If the CEO determines that these criteria are met, section 269P(3) requires the CEO to issue a written TCO specifying the goods to which the concession applies.
Under the Act, the CEO has obligations to assess applications for TCOs. This involves verifying that the application is not for goods specified in section 269SJ, which are ineligible for TCOs. The CEO must also ensure that the application meets the core criteria as outlined in section 269C. If the application is deemed valid, the CEO must publish a notice in the Gazette inviting submissions from interested parties, as required by subsection 269K(1). This notice allows any person who believes there are grounds for not granting the TCO to submit their views. Once the application is approved, the TCO comes into effect on the day the application was lodged, as per subsection 269S(1). Additionally, the CEO must ensure that the TCO does not disadvantage any person or impose liabilities for actions taken before the TCO's effective date, as specified under paragraph 126(1)(r) of the Regulations.
The Act imposes several requirements on parties applying for a TCO. Firstly, the applicant must ensure that the goods in question do not have substitutable equivalents produced in Australia. The applicant must also demonstrate that the application aligns with the criteria set out in section 269C. Furthermore, the applicant is expected to respond to any submissions made during the consultation period if the CEO decides to invite them. The CEO, on the other hand, must assess the application rigorously to ensure it meets all eligibility criteria and must consider any submissions received before making a decision. The CEO is also required to publish the notice in the Gazette to allow for public input, although no submissions were received for this particular TCO.
Breaching the requirements set out in the Customs Act 1901 can result in both civil and criminal consequences. While specific offences and penalties for the misuse of TCOs are not detailed in the explanatory statement, general provisions under the Act may apply. For example, section 269 of the Customs Act 1901 could impose penalties for making false statements or providing misleading information in an application. The penalties for such breaches can include substantial fines and, in severe cases, imprisonment. For instance, under section 269, penalties for making false statements can reach up to five years imprisonment and/or a fine of up to $22,000. The exact penalties depend on the nature and severity of the breach, with the courts having discretion in determining the appropriate penalty.