EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0605044
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 oil film bearing seal sets on 10 March 2006.
Instrument
TCO No 0605044 was made on 26 May 2006. It declares that those certain oil film bearing seal sets 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. 0605044 is taken to have come into force on 10 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. 0605044, enacted in 2006, amends the Customs Act 1901 by granting tariff concessions for certain oil film bearing seal sets. This instrument was introduced to address the gap in duty concessions for goods that are not produced in Australia and for which no substitutable domestic goods exist. The instrument was enacted by the Chief Executive Officer of Customs under the authority of the Customs Act 1901. The policy objective behind this instrument is to provide tariff relief to importers of specified goods by reducing the customs duty rate to zero, thereby encouraging trade and reducing costs for businesses importing these particular goods.
The instrument came into force on the day the application was lodged, 10 March 2006, and does not disadvantage any person or impose liabilities on anyone for actions taken before its registration. Importers of the specified goods can benefit from this concession by applying for a refund of duties paid on imports since the effective date of the instrument. This measure aligns with the overarching goal of facilitating smoother and more cost-effective international trade.
Scope and Application
The Tariff Concession Instrument No. 0605044, made under the Customs Act 1901, applies to the specific case of Bluescope Steel Ltd's application for tariff concessions on certain oil film bearing seal sets, which were approved on 26 May 2006. This legislation specifically governs the process through which tariff concessions are granted by the Chief Executive Officer of Customs, ensuring that a lower rate of customs duty applies to the goods specified in the concession order. The application of the Customs Act 1901 extends to any person or entity seeking tariff concessions for goods, provided that these goods do not fall under the exclusions specified in section 269SJ of the Act. The Act applies nationally across Australia, affecting all states and territories uniformly.
The application process mandates that the CEO must ensure no substitutable goods are produced in Australia before approving an application. The approval hinges on the CEO's satisfaction that the core criteria, including the absence of substitutable goods produced in Australia in the ordinary course of business, are met. The legislation provides a clear geographic and jurisdictional reach, impacting all entities importing or exporting the specified goods within Australia, and does not impose any additional liabilities or disadvantages to persons other than the Commonwealth. This instrument is effective from the date the application was lodged, in this instance, 10 March 2006.
Key Provisions
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) through which lower rates of customs duty can be applied to certain goods. Section 269F of the Act allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the CEO is satisfied that the application does not pertain to goods excluded by section 269SJ, the CEO must assess whether the application meets the core criteria outlined in section 269C. The application meets these criteria if, on the day it was lodged, no substitutable goods were being produced in Australia in the ordinary course of business, as defined by sections 269D and 269E.
The obligations imposed by the Customs Act 1901 on the parties involved are primarily centred around the application and assessment process for TCOs. The CEO of Customs is mandated to ensure that any TCO application is valid and meets the specified criteria. Additionally, once an application is accepted as valid, the CEO must publish a notice in the Gazette (subsection 269K(1)), inviting any interested parties to submit reasons why the TCO should not be made. In this instance, the CEO did not receive any submissions in response to the published notice. The process ensures that the rights of all stakeholders, particularly those of importers, are protected and that no person is disadvantaged or incurs liabilities under the TCO for actions taken before its registration.
In the event of a breach of the provisions set out in the Customs Act 1901, various penalties and consequences may apply. While the explanatory statement does not detail specific offences or penalties for breaches of TCOs, the general framework of the Customs Act would typically include both civil and criminal penalties. Civil penalties might involve fines or other financial sanctions, while criminal penalties could encompass imprisonment, depending on the nature and severity of the breach. The maximum penalties would be determined by the specific provisions of the Customs Act and any applicable regulations. It is essential for all parties involved to adhere to the requirements and obligations set out in the Act to avoid any potential legal repercussions.