EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606245
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 ovens parts on 6 April 2006.
Instrument
TCO No 0606245 was made on 30 June 2006. It declares that those certain finish ovens 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 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. 0606245 is taken to have come into force on 6 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 Customs Act 1901, enacted by the Parliament of Australia, was updated to address the need for a streamlined process to provide tariff concessions for specific goods that are not produced in Australia. This was aimed at fostering economic efficiency by lowering the customs duty on imported goods that have no Australian-made equivalents, thus encouraging trade and investment. Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs, who must determine whether an application meets the core criteria, such as the absence of substitutable goods produced in Australia. The Tariff Concession Instrument No. 0606245, issued on 30 June 2006, is an example of such an order applied to certain finish ovens parts, resulting in a reduction of duty from 5% to 0%. This legislative instrument facilitates the customs process for importers by reducing duty rates and potentially allowing for duty refunds on goods imported since the effective date of the order, thereby supporting the policy objective of promoting fair and competitive trade practices.
Scope and Application
The Tariff Concession Instrument No. 0606245 applies to the process of obtaining tariff concessions for certain goods under the Customs Act 1901, facilitating lower rates of customs duty for those goods specified in the order. The instrument is applicable to the Chief Executive Officer of Customs, who is responsible for deciding whether an application for a tariff concession order (TCO) meets the core criteria as outlined in the Act. The application process is available to any person who wishes to apply for a TCO in respect of goods that are not specified in section 269SJ of the Act, which details those goods that cannot be subject to a TCO. The instrument's jurisdictional reach is national, extending across Australia, as it involves the application and administration of customs duties. However, it does not impose any liabilities on any person, and it does not affect the rights of any person other than the Commonwealth as at the date of registration. Any subordinate instruments or regulations that may further detail the application and enforcement of the TCO would extend or clarify the application of this primary legislation.
Key Provisions
The Tariff Concession Instrument No. 0606245, which comes under the Customs Act 1901, establishes a framework for Tariff Concession Orders (TCOs) that reduce customs duty rates on specified goods. Section 269F of the Act allows for applications to be made to the Chief Executive Officer of Customs (CEO) for a TCO, provided the goods do not fall under the restricted categories specified in section 269SJ. The CEO must determine if the application meets the core criteria outlined in section 269C, which is satisfied when no substitutable goods are produced in Australia on the date of the application, as defined by sections 269D and 269E.
Once the CEO is satisfied that the application meets these criteria, they are required under section 269P(3) to issue a written TCO, specifying that the goods in question are subject to a reduced duty rate as outlined in Schedule 4 of the Customs Tariff Act 1995. For the specific case of Bluescope Steel Ltd's application for certain finish oven parts, the TCO No. 0606245 was issued on 30 June 2006, reducing the duty rate from 5% to 0%. This TCO became effective on 6 April 2006, the date the application was lodged, under the provisions of section 269S(1).
Entities subject to the Act, such as Bluescope Steel Ltd, must ensure their applications for TCOs are compliant with the statutory requirements. This includes verifying that no substitutable goods are produced in Australia and providing all necessary documentation to support the application. The CEO, in turn, has an obligation to review these applications thoroughly, assess whether they meet the core criteria, and make a decision accordingly. Additionally, the CEO is mandated to publish a notice in the Gazette under subsection 269K(1) to invite submissions from interested parties on the proposed TCO, although in this instance, no submissions were received.
Failure to comply with the requirements of the Act or the TCO process can lead to legal consequences. While specific offences and penalties are not detailed within the explanatory statement, breaches of customs regulations generally can result in significant penalties under the Customs Act 1901. These may include fines and potential criminal charges, with the severity of the penalty depending on the nature and extent of the breach. The Act ensures that the rights of importers are protected and can benefit from duty refunds on goods imported since the effective date of the TCO, without imposing any additional liabilities on individuals or entities.