EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0605340
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 finish oven motorised dampers on 21 March 2006.
Instrument
TCO No 0605340 was made on 2 June 2006. It declares that those certain finish oven motorised dampers 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. 0605340 is taken to have come into force on 21 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, provides a framework for the administration of customs and excise duties, among other things. A significant part of this framework is the scheme for Tariff Concession Orders (TCOs) under Part XVA of the Act, which allows for the reduction or exemption of customs duties on specified goods. This scheme was introduced to address the need for flexibility in tariff rates to support various economic policies, including facilitating trade and industry development by making imported goods more competitively priced. The explanatory statement for Tariff Concession Instrument No. 0605340, issued on 2 June 2006, illustrates this scheme in action by detailing a concession for certain finish oven motorised dampers, reducing their duty rate from 5% to free, following an application by Bluescope Steel Ltd. The process involves the Chief Executive Officer of Customs assessing applications against core criteria to ensure no substitutable Australian-produced goods exist, and then, if satisfied, issuing a TCO. The policy objective here is to ensure that the Australian market is supplied with necessary goods at a reduced cost, thereby potentially stimulating demand and economic activity within relevant industries.
Scope and Application
The Tariff Concession Instrument No. 0605340, made under the Customs Act 1901, applies to specific goods for which Bluescope Steel Ltd has applied for a Tariff Concession Order (TCO). This legislation is pertinent to entities involved in the importation of certain finish oven motorised dampers, allowing them to benefit from a lower rate of customs duty, specifically zero per cent, as opposed to the general rate of five per cent. This concession is granted under the condition that no substitutable goods are produced in Australia, as outlined in the Customs Act. The geographic reach of this Act is national, extending across Australia and governed by Commonwealth law. It is important to note that the Act does not apply to goods specified in section 269SJ, which are ineligible for a TCO. The application process for a TCO includes mandatory publication in the Gazette to invite any submissions against the concession, although in this instance, no such submissions were received. The commencement of the TCO is retroactive to the date the application was lodged, meaning it is effective as of 21 March 2006. Importantly, the TCO does not affect any pre-existing rights or impose liabilities on persons other than the Commonwealth, ensuring that only importers stand to benefit from this tariff reduction.
Key Provisions
The Tariff Concession Instrument No. 0605340, under the Customs Act 1901, provides for a reduction in customs duty for certain finish oven motorised dampers (section 269F). This instrument was created after Bluescope Steel Ltd applied for a tariff concession order (TCO) on 21 March 2006, which the Chief Executive Officer of Customs (CEO) accepted as meeting the core criteria (section 269C, 269E, 269D). Specifically, section 269P(3) of the Act mandates that a TCO must be issued if the CEO determines that no substitutable goods are produced in Australia for the goods in question. In this instance, the CEO confirmed that no substitutable goods were produced in Australia, thus fulfilling the requirement for a TCO.
The obligations imposed by this Act on entities such as Bluescope Steel Ltd include ensuring that their application for a TCO is thorough and compliant with the criteria set out in the Customs Act 1901. The CEO must also publish a notice in the Gazette inviting any interested parties to submit objections to the TCO if they believe it should not be made (subsection 269K(1)). In this case, no submissions were received in response to the notice. Additionally, the Act mandates that the TCO come into force on the day the application was lodged, which for TCO No. 0605340 was 21 March 2006 (subsection 269S(1)).
Regarding potential breaches and consequences, the Act does not specify particular offences or penalties for failing to comply with the TCO provisions. However, general legal obligations and administrative procedures under the Customs Act 1901 and associated regulations would apply, potentially leading to civil or administrative penalties. The CEO has the authority to enforce compliance and may impose fines or other penalties as stipulated by relevant laws and regulations. While the specific penalties are not detailed in this particular instrument, they could include fines or other sanctions depending on the nature and severity of the breach.