EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606143
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 induction edge heater poles on 10 April 2006.
Instrument
TCO No 0606143 was made on 30 June 2006. It declares that those certain induction edge heater poles 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 0%.
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. 0606143 is taken to have come into force on 10 April 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. 0606143, enacted under the Customs Act 1901, addresses the problem of ensuring that specific goods, in this case certain induction edge heater poles, are not subject to a tariff when there are no substitutable goods produced in Australia. This legislative instrument was introduced to facilitate tariff concessions, providing economic benefits to importers by reducing or eliminating customs duty on certain imported goods, thus encouraging trade and competition within the Australian market. The instrument was enacted by the Chief Executive Officer of Customs, who is mandated to make Tariff Concession Orders (TCOs) under section 269F of the Customs Act 1901, provided that the application meets the core criteria as outlined in section 269C. The policy objective is to support Australian businesses by ensuring that they do not face undue competition from domestically produced substitutable goods, thereby maintaining a fair and competitive marketplace.
Scope and Application
The Customs Act 1901, specifically through its Part XVA, governs the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to individuals or entities that seek to reduce the customs duty on goods by applying for a TCO. The scope of the Act is targeted at goods that are not produced in Australia in the ordinary course of business, where the application for tariff concession meets the specified core criteria. The application process involves submitting a request to the CEO, who must ensure that the goods are not among those prohibited from tariff concessions as outlined in section 269SJ. Once the application satisfies the criteria, the CEO is obligated to issue a TCO, which then applies a reduced rate of customs duty on the specified goods. The TCO No. 0606143, made on 30 June 2006, is an example of this process, reducing the duty on certain induction edge heater poles from 5% to 0%. The Act's jurisdictional reach is national, affecting all importers within Australia. Exclusions to the Act are limited to goods specified in section 269SJ, and it does not disadvantage or impose liabilities on persons other than the Commonwealth concerning actions taken before the TCO registration date.
Key Provisions
The main sections of the Customs Act 1901 that are relevant to this Tariff Concession Order (TCO) include section 269C, which outlines the core criteria that an application must meet for a TCO to be granted, and section 269P, which details the process for the Chief Executive Officer (CEO) to make a TCO once the criteria are satisfied. Specifically, section 269C stipulates that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, while section 269P(3) mandates that the CEO must issue a written order if the application meets these criteria. Section 269F allows a person to apply to the CEO for a TCO in respect of goods, and section 269SJ excludes certain goods from being eligible for a TCO.
The Act imposes certain obligations on the parties involved. The CEO must determine whether an application meets the core criteria as specified in section 269C. If the application is deemed valid and meets these criteria, the CEO is obligated to issue a written TCO as outlined in section 269P. Furthermore, under section 269K, the CEO must publish a notice in the Gazette inviting submissions from any interested parties regarding the application, although no submissions were received in this case.
In terms of potential consequences for non-compliance, the Act does not specify offences directly related to the TCO process itself. However, any breaches of customs regulations, including those related to the misdeclaration of goods or the fraudulent use of a TCO, could lead to civil or criminal penalties. For instance, under the Customs Act, serious breaches could result in fines or imprisonment, depending on the severity of the offence. The maximum penalties for such breaches are detailed in the relevant sections of the Act and associated regulations, which could include substantial fines and lengthy imprisonment terms for more egregious violations.
Under the Customs Tariff Act 1995, importers can apply for a refund of duty on goods imported since the TCO was taken to have come into force, as stipulated in paragraph 126(1)(r) of the Regulations. This refund process is designed to ensure that importers are not disadvantaged by the retroactive application of the TCO. Importantly, the TCO does not impose any liabilities on any person, thereby safeguarding the rights of individuals and entities other than the Commonwealth.