EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0604881
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 pickle line tank parts on 2 March 2006.
Instrument
TCO No 0604881 was made on 26 May 2006. It declares that those certain pickle line tank parts 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. 0604881 is taken to have come into force on 2 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 Tariff Concession Instrument No. 0604881, enacted in 2006 under the Customs Act 1901, addresses the need to provide tariff concessions for specific imported goods when no suitable Australian-made alternatives exist. This legislative instrument was introduced by the Chief Executive Officer of Customs, in accordance with section 269F of the Act, to ensure that businesses can access necessary goods at a reduced customs duty rate, thereby promoting economic efficiency and fair competition. The policy objective is to facilitate the importation of goods for which there are no substitutable Australian products, thereby benefiting businesses and consumers by potentially lowering the cost of these imported goods. The instrument was made effective from 2 March 2006, the date on which the application for the tariff concession was lodged, and it does not adversely affect any existing rights or impose new liabilities on persons other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0604881 under the Customs Act 1901 applies to specific goods identified in the instrument, in this case, certain pickle line tank parts, and is aimed at facilitating the importation of these goods by providing a tariff concession. This instrument is applicable to Bluescope Steel Ltd, the entity that submitted the application for the tariff concession order, as well as to any other entities importing the specified goods into Australia. The geographic reach of this Act is national, as it applies across Australia and is administered under the Commonwealth. The Act allows for the concession of customs duty for goods specified in the order, provided no substitutable goods are produced in Australia, as per section 269C of the Act. The instrument does not impose any liabilities on any person and does not disadvantage anyone as it only affects rights prospectively from the date of registration. The application of this Act can be extended or restricted through subordinate instruments as per the Customs Act 1901.
Key Provisions
The Customs Act 1901, as amended, allows for the creation of Tariff Concession Orders (TCOs) which apply reduced or free customs duties on specific goods (s 269F). This concession is contingent upon the application being made by a person, and the Chief Executive Officer (CEO) of Customs determining that the goods in question are not prohibited under section 269SJ, and that no substitutable goods are being produced in Australia at the time of application (s 269C). A TCO is only applicable if, at the time of application, no goods similar in use to the ones being applied for are being produced in Australia (s 269P(3)). The CEO is required to issue a written order if these criteria are met, specifying the reduced duty rate applicable to the goods in question (s 269P(3)).
Entities applying for a TCO must ensure that their application is valid and meets the statutory criteria outlined in the Customs Act 1901. The CEO has the responsibility of verifying that the application is not in relation to goods that are explicitly excluded under section 269SJ, and that no substitutable goods are being produced in Australia. Furthermore, the CEO is obligated to publish a notice in the Gazette inviting any interested parties to submit any objections to the proposed TCO (s 269K(1)). In the case of TCO No. 0604881, the CEO did not receive any submissions challenging the validity of the application.
Failure to comply with the requirements set out in the Customs Act 1901 may lead to civil or criminal consequences. However, the explanatory statement does not detail specific offences or penalties related to breaches of the TCO provisions. The Act does not impose any liabilities on individuals or entities for actions taken before the effective date of the TCO, protecting them from any retroactive disadvantages (s 269S(1)). Importers, however, stand to benefit from the TCO, potentially applying for refunds on duties paid on goods imported since the effective date of the concession (Reg 126(1)(r)).
In summary, TCO No. 0604881, which was issued on 26 May 2006, provides for a zero duty rate on certain pickle line tank parts, effective from 2 March 2006, the date the application was lodged. The CEO was satisfied that no substitutable goods were produced in Australia at the time, thereby meeting the statutory criteria. The TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person. Importers of the specified goods may apply for a refund of duties paid since the effective date of the TCO.