EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606365
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 air quenches on 5 April 2006.
Instrument
TCO No 0606365 was made on 7 July 2006. It declares that those certain air quenches 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. 0606365 is taken to have come into force on 5 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. 0606365 was enacted in 2006 under the Customs Act 1901, addressing a gap in tariff concessions for specific goods. The instrument was introduced to provide relief to importers by reducing the customs duty rate for certain air quenches, as applied to Bluescope Steel Ltd's application. The Customs Act 1901 allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, provided that the application meets the core criteria, including the absence of substitutable goods produced in Australia. The policy objective here is to support the import of goods that are not domestically produced, thereby benefiting importers by reducing their duty liabilities. The instrument was made effective from the date of the application, 5 April 2006, and does not impose any new liabilities or disadvantage existing rights of non-Commonwealth entities.
Scope and Application
The Tariff Concession Instrument No. 0606365 under the Customs Act 1901 applies to entities seeking a tariff concession on certain goods imported into Australia. Specifically, it pertains to Bluescope Steel Ltd's application for a tariff concession on certain air quenches, which are goods subject to a lower rate of customs duty. The instrument applies to these particular goods and the entities involved in their importation. The geographic and jurisdictional reach of the Act extends nationally, as it is a Commonwealth Act. The Act allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) for goods that meet specified criteria, such as the absence of substitutable goods produced in Australia. The application process involves satisfying core criteria, including ensuring no substitutable goods are produced domestically, and publishing a notice in the Gazette inviting submissions, although in this case, no submissions were received. The TCO is effective from the date the application was lodged, with no retroactive impact on existing rights or liabilities, thereby benefiting importers by allowing duty refunds from the effective date. The instrument does not specify any exclusions or thresholds beyond the criteria outlined in the Act. The application and effect of the TCO may be further detailed or adjusted through subordinate instruments.
Key Provisions
The main operative sections of this legislation (sections 269C, 269B, 269E, 269F, 269P, and 269S) establish the framework for Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. The CEO must decide whether the application meets the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269B). If the CEO is satisfied that the application meets the core criteria, they must make a written order (a TCO) that declares the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (section 269P(3)). This process ensures that the goods specified in the TCO application are eligible for a reduced rate of customs duty.
The Act imposes several obligations on the parties involved. The CEO is required to make a decision on a TCO application in accordance with the core criteria. If satisfied that the application meets the criteria, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). The CEO must consider any submissions received before making a final decision. Once a TCO is made, it comes into force on the day the application for the TCO was lodged (subsection 269S(1)). The TCO does not affect the rights of a person, other than the Commonwealth, as at the date of registration in a way that disadvantages them or imposes liabilities on them in respect of anything done or omitted before the registration date (subsection 269S(2)).
The legislation does not explicitly outline specific offences, penalties, or civil/criminal consequences for breach. However, it is implied that failure to comply with the obligations and requirements set out in the Act could lead to legal consequences. The Customs Act 1901, in general, includes provisions for penalties in cases of non-compliance with customs laws, which could include fines and imprisonment. The maximum penalties would depend on the specific nature of the breach and the relevant sections of the Customs Act 1901. The Tariff Concession Instrument No. 0606365 itself does not detail specific penalties but rather focuses on the process and criteria for granting tariff concessions.