EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0605458
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 ovens on 21 March 2006.
Instrument
TCO No 0605458 was made on 2 June 2006. It declares that those certain paint line finish ovens 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. 0605458 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 Tariff Concession Instrument No. 0605458, enacted under the Customs Act 1901, aims to address the need for tariff concessions that lower customs duty rates on specific goods. The instrument was introduced to provide relief to businesses that import goods not produced in Australia, thereby encouraging competition and reducing costs. This was achieved by allowing the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) when certain criteria were met, such as the absence of substitutable goods produced in Australia. The process involves an application from a party like Bluescope Steel Ltd, followed by a decision by the CEO, and a publication of the application in the Gazette to allow for public submissions, although in this instance, none were received. The tariff concession became effective on the date the application was lodged, which in this case was 21 March 2006, and it benefits importers by allowing them to apply for a refund of duty on imported goods since the effective date.
Scope and Application
The Customs Act 1901, specifically Part XVA, provides for Tariff Concession Orders (TCOs) that can be made by the Chief Executive Officer of Customs (CEO) to apply a lower rate of customs duty on certain goods. The Act applies to any person or entity who may apply for a TCO for goods not specified in section 269SJ of the Act, which outlines goods that cannot be subject to a TCO. The application process requires the CEO to determine if the goods in question are not substitutable by goods produced in Australia, which is defined under section 269D and 269E of the Act. This Act has national jurisdictional reach within Australia and is administered at a Commonwealth level. The scope of the Act is extended through subordinate instruments such as the Customs Tariff Act 1995, which specifies the applicable duty rates for goods under a TCO. There are no exclusions or exemptions specified in this particular TCO; however, the rights of non-Commonwealth persons are preserved, and no new liabilities are imposed on them.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0605458 under the Customs Act 1901 (section 269C) outline the process for granting tariff concession orders (TCOs). The legislation mandates that a TCO can be applied for by any person, but the Chief Executive Officer of Customs (CEO) must ensure that the application pertains to goods not specified in section 269SJ, which lists goods ineligible for TCOs. If the CEO determines that the application meets the core criteria, specifically that no substitutable goods were produced in Australia on the application day, the CEO is required to issue a written TCO (section 269P(3)). This order effectively applies a lower customs duty rate to the specified goods. In this particular instance, the TCO No. 0605458 declares that certain paint line finish ovens are subject to a free rate of duty, down from the general rate of 5%, as no substitutable goods were produced in Australia at the time of application.
The obligations imposed by this Act on the parties involved are clear and specific. The CEO of Customs must rigorously evaluate TCO applications to confirm that they meet the statutory criteria. This involves verifying that no substitutable goods were produced in Australia on the day the application was lodged, as outlined in sections 269C and 269D of the Act. The CEO must also ensure transparency and fairness by publishing notices in the Gazette inviting submissions from any interested parties who might have reasons to oppose the TCO. This was done for TCO No. 0605458, although no submissions were received. Once a TCO is issued, it must be communicated effectively to ensure all stakeholders are aware of the new duty rates applicable to the specified goods.
Breaches of the conditions set out in the Customs Act 1901 and the associated regulations can result in serious consequences. While the specific legislative instrument does not detail penalties for non-compliance, the broader Customs Act encompasses various offences related to incorrect declarations, fraudulent activities, and other breaches. These can lead to civil penalties, criminal charges, or both, depending on the severity of the offence. For instance, knowingly making a false statement or representation under the Act can result in fines and imprisonment, with maximum penalties stipulated under relevant sections of the Act. The precise consequences for non-compliance should be assessed in the context of the broader legislative framework.