EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0605154
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 copper nickel heat exchanger finned tubes on 13 March 2006.
Instrument
TCO No 0605154 was made on 2 June 2006. It declares that those certain copper nickel heat exchanger finned tubes 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. 0605154 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, as amended, includes provisions for Tariff Concession Orders (TCOs) which reduce customs duties on certain goods. Enacted by the Australian Parliament, the Act was introduced to address the need for a flexible mechanism to reduce customs duties on imported goods, thereby promoting trade and economic efficiency. Specifically, the Act allows the Chief Executive Officer of Customs to grant tariff concessions on goods where no substitutable goods are produced in Australia, ensuring that Australian industries are not unfairly disadvantaged. Tariff Concession Instrument No. 0605154, made on 2 June 2006, applies these principles to certain copper nickel heat exchanger finned tubes, reducing their duty rate to zero. The instrument was developed following an application by Bluescope Steel Ltd and was made without any submissions against it, indicating broad acceptance of the tariff concession.
Scope and Application
The Tariff Concession Instrument No. 0605154 under the Customs Act 1901 applies to the specific category of copper nickel heat exchanger finned tubes for which Bluescope Steel Ltd submitted an application on 13 March 2006. The application was processed by the Chief Executive Officer of Customs, who determined that no substitutable goods were produced in Australia at the time of the application. Consequently, the CEO issued the Tariff Concession Order (TCO) on 2 June 2006, declaring that these specific goods would be subject to a zero rate of customs duty instead of the general rate of 5%. The TCO is effective from 13 March 2006, the date the application was lodged, and it does not disadvantage any person other than the Commonwealth nor impose any liabilities on such individuals for actions taken prior to the registration of the TCO. Importers of the specified goods will be able to apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The Tariff Concession Instrument No. 0605154 pertains to the Customs Act 1901 and establishes a framework for Tariff Concession Orders (TCOs), which apply lower rates of customs duty to specified goods. Section 269F of the Act allows individuals to apply to the Chief Executive Officer (CEO) of Customs for a TCO, provided the goods are not listed in section 269SJ, which specifies goods ineligible for TCOs. For a TCO to be granted, section 269C of the Act requires that no substitutable goods were produced in Australia on the day the application was lodged. The definitions for 'substitutable goods', 'goods produced in Australia', and 'ordinary course of business' are outlined in sections 269D, 269E, and 269P(3) of the Act respectively.
The obligations under this legislation for the CEO include reviewing TCO applications to ensure they meet the core criteria. If the application satisfies these criteria, the CEO must issue a written order, a TCO, as stipulated in section 269P(3). This TCO specifies the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applicable to the goods in question. In the case of Bluescope Steel Ltd, a TCO was issued for certain copper nickel heat exchanger finned tubes, declaring them subject to item 50 of Schedule 4, with a duty rate of free as opposed to the general rate of 5%.
Upon accepting a TCO application as valid, the CEO is required by subsection 269K(1) of the Act to publish a notice in the Gazette, inviting any person who believes there are reasons why the TCO should not be made to submit their concerns. In this instance, no submissions were received. According to subsection 269S(1), the TCO is deemed to have come into force on the day the application was lodged. TCO No. 0605154 is therefore effective from 13 March 2006. This legislation ensures that the rights of individuals, other than the Commonwealth, are not adversely affected by the TCO as at the date of registration, nor do they incur liabilities for actions taken before the registration date. Importers will benefit from the TCO as they can apply for a refund of duty on goods imported since the effective date of the TCO.
Failure to comply with the requirements set forth in the Customs Act 1901 and the associated regulations could result in civil or criminal penalties. While the specific penalties are not detailed in the explanatory statement, breaches of customs regulations can typically lead to fines and, in more severe cases, criminal charges. The maximum penalties may vary depending on the nature and severity of the breach, but they can include substantial financial penalties and, potentially, imprisonment.