EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0607260
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 exit coil car manifolds on 24 April 2006.
Instrument
TCO No 0607260 was made on 14 July 2006. It declares that those certain exit coil car manifolds 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. 0607260 is taken to have come into force on 24 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, facilitates the administration of customs duties and tariffs across the country. This Act was introduced to streamline and regulate the import and export of goods, ensuring a systematic collection of duties and taxes. A notable feature of the Act is the scheme under Part XVA, which allows for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to provide lower rates of customs duty on certain goods. This provision addresses the need for economic incentives to support industries and products that lack local production capabilities, thereby promoting competitive market practices and economic growth. The policy objective behind this mechanism is to ensure that the Australian market is supplied with goods at fair prices, while also protecting local industries from undue competition by preventing tariff concessions on goods that are already produced domestically.
Scope and Application
The Customs Act 1901 applies to a wide range of entities and industries, including individuals, businesses, and manufacturers, particularly those involved in importing or exporting goods that are subject to customs duties. The Act allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) which provide for a lower rate of customs duty on specified goods. This legislation is particularly relevant to entities like Bluescope Steel Ltd, which applied for a TCO for certain exit coil car manifolds, and importers who may benefit from duty refunds under the scheme. The geographic reach of the Customs Act extends across Australia, applying to all states and territories. However, the Act excludes certain goods from eligibility for a TCO as specified in section 269SJ, such as goods that could have a detrimental effect on the Australian market or national security. The Act allows for the scope of application to be further defined through subordinate instruments, including regulations and orders, thereby providing flexibility in its implementation. The Tariff Concession Instrument No. 0607260, which was made on 14 July 2006, exemplifies how the Act is applied in practice, providing tariff concessions that reduce the duty rate from 5% to 0% for the specified goods.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0607260, under the Customs Act 1901, establish the framework for Tariff Concession Orders (TCOs) and apply specifically to certain exit coil car manifolds. Section 269C (2) of the Act requires that for a TCO application to meet the core criteria, no substitutable goods must have been produced in Australia on the date the application was lodged. This means that if the CEO is satisfied that no similar goods were manufactured domestically, a TCO can be granted (Section 269F). In this case, the CEO confirmed that no such Australian-made goods existed, leading to the issuance of TCO No. 0607260 on 14 July 2006, which specifies that these goods are subject to a 0% duty rate instead of the standard 5% (Schedule 4, item 50 of the Customs Tariff Act 1995).
The obligations imposed by the Act on the parties governed by it include the requirement for the CEO to consider applications for TCOs and to ensure that they meet the core criteria as outlined in Section 269C. Additionally, the CEO must publish a notice in the Gazette when accepting a valid TCO application, inviting any interested parties to submit objections if they believe the TCO should not proceed (Section 269K(1)). In this instance, no objections were received. Furthermore, the Act mandates that a TCO is effective from the date the application was lodged, which for TCO No. 0607260 was 24 April 2006 (Section 269S(1)).
In terms of consequences for breach or non-compliance, the Act does not specify explicit criminal or civil penalties for failing to adhere to the TCO provisions. However, any party adversely affected by the TCO could potentially seek judicial review if they could demonstrate that the CEO's decision was unreasonable or not supported by the evidence. The Act ensures that the TCO does not disadvantage any person or impose liabilities on them for actions taken before the TCO's effective date, thus safeguarding the rights of importers and others involved (Section 269S(3)). This protection is particularly relevant for importers who can apply for duty refunds on goods imported since the TCO came into effect (Regulations, paragraph 126(1)(r)).