EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0605447
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 steel wire reinforced rubber hose on 16 March 2006.
Instrument
TCO No 0605447 was made on 2 June 2006. It declares that those certain steel wire reinforced rubber hose 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. 0605447 is taken to have come into force on 16 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 regulation of customs duties, including the establishment of Tariff Concession Orders (TCOs) to grant tariff concessions on certain goods. The Customs Act 1901 was introduced to address the need for a structured approach to the application of customs duties, ensuring that the importation of goods is managed in a way that supports economic policy and trade agreements. The explanatory statement for Tariff Concession Instrument No. 0605447, issued on 2 June 2006, details the process by which Bluescope Steel Ltd successfully applied for a tariff concession on certain steel wire reinforced rubber hose. This instrument was made in accordance with section 269F of the Act, following a determination by the Chief Executive Officer of Customs that no substitutable goods were produced in Australia, thereby satisfying the core criteria for a TCO. The policy objective underpinning this concession is to provide tariff relief for goods that are not produced domestically, thereby facilitating trade and potentially reducing costs for importers of these specific goods.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders apply to goods for which a lower rate of customs duty is applicable. The process begins with an application to the CEO, who assesses whether the application meets the core criteria outlined in section 269C of the Act. Notably, the Act ensures that substitutable goods, meaning those produced in Australia that could be used in the same way as the goods in question, are not produced domestically before a TCO is granted. If the CEO determines that no substitutable goods are produced in Australia, the application is considered to meet the core criteria, leading to the creation of a TCO. The TCO applies to specific goods, such as the certain steel wire reinforced rubber hose in this instance, and is retroactive to the date the application was lodged, as specified in subsection 269S(1) of the Act. This legislation primarily affects importers and manufacturers of the specified goods, offering them tariff concessions and potential duty refunds on imports since the effective date of the TCO. It is noteworthy that the TCO does not disadvantage any existing rights or impose liabilities on any person prior to its registration, ensuring a fair application of the concessions.
Key Provisions
The Customs Act 1901, specifically under Part XVA, provides for the creation of Tariff Concession Orders (TCOs) which allow for a reduced rate of customs duty on certain goods. An application for a TCO can be made by any person to the Chief Executive Officer of Customs (CEO) under section 269F. If the goods in question are not specified in section 269SJ, which lists goods ineligible for a TCO, the CEO will assess whether the application meets the core criteria. Section 269C stipulates that a TCO application meets these criteria if, on the day of application, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for "goods produced in Australia", "ordinary course of business" and "substitutable goods" are provided in sections 269D, 269E and 269B respectively. If the CEO is satisfied that the application meets the criteria, they are required under subsection 269P(3) to issue a written TCO, specifying that the goods in question are subject to a prescribed item of Schedule 4 of the Customs Tariff Act 1995.
The obligations under the Act for the CEO involve accepting a valid TCO application and making a determination based on the core criteria. Upon accepting a TCO application, the CEO must publish a notice in the Gazette under subsection 269K(1), inviting any interested party to submit reasons why the TCO should not be granted. In the case of TCO No. 0605447, the CEO did not receive any submissions opposing the concession. Once the application is accepted as valid, the TCO comes into effect on the date the application was lodged, as per subsection 269S(1). The TCO does not disadvantage any person by affecting their rights as of the registration date or imposing liabilities for actions taken before the registration date.
In the context of TCO No. 0605447, the CEO issued the order on 2 June 2006, recognising that certain steel wire reinforced rubber hose are subject to item 50 of Schedule 4 of the Tariff, and thus benefit from a free duty rate instead of the general 5% duty. The rights of importers are positively affected by this concession, as they can apply for a refund of duty on goods imported since the TCO is deemed to have come into force under paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any liabilities on any person, ensuring that it does not adversely affect any party’s existing rights or obligations.