EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0605454
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 paint line finish oven parts on 21 March 2006.
Instrument
TCO No 0605454 was made on 2 June 2006. It declares that those certain paint line finish oven 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. 0605454 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 was enacted to provide for the collection of customs duty and to regulate the importation and exportation of goods. The Act was introduced to address the need for a comprehensive framework governing customs duties, import and export regulations, and related procedures in Australia. The Customs Act is administered by the Parliament of Australia, and the policy objective behind the Act is to facilitate international trade while ensuring the appropriate collection of duties and the enforcement of relevant regulations. Tariff Concession Orders (TCOs) are a significant part of this framework, allowing for reduced customs duty rates on certain goods under specific conditions. The Tariff Concession Instrument No. 0605454, made under the Customs Act 1901, is an example of how the Act is applied to provide tariff concessions for specific goods, in this case, certain paint line finish oven parts, which now benefit from a reduced duty rate of free, as opposed to the general rate of 5%.
Scope and Application
The Customs Act 1901, specifically Part XVA, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This Act applies to individuals or entities that apply for tariff concessions on imported goods, provided such goods are not specified in section 269SJ of the Act, which outlines goods ineligible for a tariff concession. The Act mandates that the CEO must consider whether the application meets the core criteria, primarily that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. If the application meets these criteria, the CEO issues a TCO, which declares the specified goods to which a particular tariff item applies, resulting in a reduced duty rate. The TCO's jurisdictional reach is national, encompassing all entities and individuals involved in the importation of goods subject to the concessions. However, the TCO does not disadvantage any person or impose liabilities on them for actions taken prior to the TCO's registration. Furthermore, the application of the Act may be extended or clarified through subordinate instruments, which can provide additional details or exceptions not explicitly stated in the primary Act.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0605454 under the Customs Act 1901 include sections 269C, 269F, 269P, and 269SJ. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of certain goods. Section 269C sets out the core criteria that must be met for an application to be considered valid, namely that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P mandates that if the CEO is satisfied the application meets these criteria, they must make a written order (TCO), specifying the reduced customs duty applicable to the goods. Section 269SJ lists goods that cannot be the subject of a TCO.
The Act imposes specific obligations on parties or entities it governs. The CEO is required to assess whether a TCO application meets the core criteria as outlined in section 269C. This involves confirming that no substitutable goods were produced in Australia on the day the application was lodged. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as required by section 269K. If no submissions are received, the CEO proceeds to make the TCO. Additionally, the Act ensures that the rights of non-Commonwealth persons are not adversely affected by the TCO, and it provides for potential refunds of duty to importers of the affected goods.
Under the Customs Act 1901, breaches of the provisions related to TCOs could lead to various civil and criminal consequences. Although specific offences and penalties are not detailed in the explanatory statement, general provisions of the Act likely apply. For instance, making false statements in an application could be considered an offence, potentially leading to criminal penalties such as fines or imprisonment. Civil penalties may also apply for non-compliance with the terms of the TCO or failure to meet the obligations set out in the Act. The exact penalties would depend on the nature and severity of the breach, as well as the provisions of the broader Customs Act.
Tariff Concession Instrument No. 0605454 specifically declares that certain paint line finish oven parts are subject to a concessional rate of duty under item 50 of Schedule 4 to the Customs Tariff Act 1995. The general rate of duty on these goods is 5%, but the TCO sets this rate at free. This means that importers of these specific goods will not need to pay customs duty if they import these items after the TCO came into force on 21 March 2006. This concessional treatment is contingent on the CEO's determination that no substitutable goods were produced in Australia, thereby meeting the core criteria set out in section 269C.