EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0605046
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 13 March 2006.
Instrument
TCO No 0605046 was made on 2 June 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. 0605046 is taken to have come into force on 13 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 to facilitate the administration of customs and excise duties and includes provisions for tariff concession orders. This particular legislation, F2006L01743, was introduced to address the need for tariff concessions for specific goods where no substitutable products are produced in Australia. The Tariff Concession Instrument No. 0605046 was made by the Chief Executive Officer of Customs under section 269F of the Act, in response to an application from Bluescope Steel Ltd for certain pickle line tank parts. The policy objective is to reduce the duty on these goods to zero, benefiting importers by potentially allowing them to claim refunds for duties paid on imports since the concession took effect, without imposing any new liabilities. The instrument was published in the Gazette with no objections received, and it came into force on the date the application was lodged.
Scope and Application
The Tariff Concession Instrument No. 0605046 pertains to the Customs Act 1901, specifically under Part XVA which allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to any person or entity that seeks to have a lower rate of customs duty applied to specific goods, provided those goods are not listed in section 269SJ of the Act, which outlines goods ineligible for TCOs. The instrument is effective on a Commonwealth level, governing the imposition and remission of customs duties across Australia. Notably, the TCO does not retroactively affect the rights of any individual or entity, meaning any actions taken before the instrument's effective date remain unaffected. This particular instrument, TCO No. 0605046, was applied for by Bluescope Steel Ltd for certain pickle line tank parts and was effective from 13 March 2006. The TCO was made on 2 June 2006, declaring that these specific parts would be subject to a free rate of duty as opposed to the general rate of 5%.
Key Provisions
The key operative sections of the Customs Act 1901, specifically as applied in Tariff Concession Instrument No. 0605046, require that certain pickle line tank parts are identified and declared as goods to which a specified item of Schedule 4 to the Customs Tariff Act 1995 applies, thereby granting a tariff concession (sections 269C and 269P). The CEO of Customs is mandated to decide on applications for Tariff Concession Orders (TCOs) based on whether the goods are substitutable by Australian-produced goods (section 269C). If no such substitutable goods are produced in Australia, a TCO may be granted, leading to a tariff reduction or exemption (section 269P). In this instance, the CEO determined that no substitutable goods were produced in Australia and hence approved the TCO for certain pickle line tank parts, which now benefit from a zero percent duty rate, down from the general 5 percent rate (section 269P(3)).
The obligations imposed on parties, particularly Bluescope Steel Ltd, include the requirement to apply for a TCO if they believe their goods meet the specified criteria (section 269F). The CEO, on the other hand, is obligated to assess whether the application meets the core criteria, which includes ensuring that no substitutable goods are being produced in Australia (sections 269C and 269P). Furthermore, the CEO must publish a notice in the Gazette inviting any interested parties to submit their views on the proposed TCO, although in this case, no submissions were received (subsection 269K(1)).
Should there be any breach of the provisions outlined in the Customs Act 1901 or the related regulations, various penalties may apply. While the specific penalties are not detailed in the explanatory statement, breaches of customs legislation generally can result in civil or criminal penalties. Civil penalties might include financial penalties, while criminal penalties could range from fines to imprisonment, depending on the severity of the breach. The Act and associated regulations provide the framework within which these penalties are determined and enforced.