EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0604915
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 continuous paint line bearing and bearing housings on 8 March 2006.
Instrument
TCO No 0604915 was made on 26 May 2006. It declares that those certain continuous paint line bearing and bearing housings 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 10%. 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. 0604915 is taken to have come into force on 8 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, established a framework for the application of customs duty on imported goods, including provisions for Tariff Concession Orders (TCOs) under Part XVA. This Act was designed to address the need for a mechanism by which the Chief Executive Officer of Customs could grant concessions on customs duty for certain goods, thereby facilitating trade and economic efficiency. The Tariff Concession Instrument No. 0604915 was introduced to provide a specific concession for Bluescope Steel Ltd concerning certain continuous paint line bearing and bearing housings, reducing the rate of duty from 10% to free, subject to the core criteria set out in the Act being met. The policy objective behind this concession is to encourage the import of goods that are not produced domestically, thereby supporting competitive markets and benefiting importers by potentially reducing their duty liabilities.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, providing for a lower rate of customs duty on certain goods. This legislative framework applies to entities or individuals who apply for tariff concessions in respect of goods, provided these goods are not specified in section 269SJ of the Act, which outlines goods ineligible for TCOs. The TCO process requires that, at the time of application, no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269D, 269E, and 269F of the Act. Once the core criteria are met, the CEO issues a written TCO, reducing the applicable duty rate. The application of TCOs is national in scope, extending across Australia as governed by Commonwealth law. Notably, TCOs do not affect the rights of any person, other than the Commonwealth, as of the date of registration and do not impose liabilities on any person. The TCOs are effective from the date the application is lodged, with rights to duty refunds available to importers under the regulations.
Key Provisions
The Tariff Concession Instrument No. 0604915 under the Customs Act 1901 provides for a tariff concession order (TCO) for certain continuous paint line bearing and bearing housings. This instrument, effective from 8 March 2006, was made on 26 May 2006 and declares that the specified goods are to be treated under item 50 of Schedule 4 to the Customs Tariff Act 1995, with the duty rate set at free as opposed to the general rate of 10% (sections 269C, 269P(3)). This means that the goods in question will not incur customs duty when imported, provided they meet the criteria set out in the Act. The instrument was made following an application by Bluescope Steel Ltd, which applied for the concession on 8 March 2006.
Under the Customs Act 1901, certain obligations and requirements are imposed on parties involved in the tariff concession process. The Chief Executive Officer of Customs (CEO) must ensure that applications for TCOs meet the core criteria, which includes verifying that no substitutable goods are produced in Australia on the day the application is lodged (section 269C). The CEO must also publish a notice in the Gazette inviting submissions from any person who may have an interest in the application. If no submissions are received, the CEO can proceed to make the TCO (section 269K(1)). Additionally, the CEO is responsible for ensuring that the rights of persons other than the Commonwealth are not adversely affected by the TCO (subsection 269S(1)).
The Customs Act 1901 also outlines the consequences for breaches of its provisions. While the explanatory statement does not detail specific offences or penalties for non-compliance with the TCO, it is understood that general penalties for breaches of the Customs Act may apply. These can include fines and imprisonment for serious offences, as well as civil penalties for less severe breaches. The exact penalties would depend on the specific nature of the breach and would be determined in accordance with the provisions of the Act and any applicable regulations.
The explanatory statement notes that the tariff concession does not impose any liabilities on any person other than the Commonwealth and does not disadvantage any person by affecting their rights as at the date of registration. Importers of the specified goods can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations). This provision ensures that the benefits of the tariff concession are passed on to the importers without any negative impact on their existing rights or obligations.