EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0607261
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 directional proportional valves on 24 April 2006.
Instrument
TCO No 0607261 was made on 14 July 2006. It declares that those certain directional proportional valves 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. 0607261 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 Australian Parliament, establishes the framework within which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders provide a lower rate of customs duty for certain goods, addressing the need for targeted tariff reductions that can stimulate specific sectors or industries by making imported goods more competitive with locally produced alternatives. The Act aims to facilitate economic efficiency and support domestic industries by allowing the CEO to grant tariff concessions when no substitutable goods are produced in Australia. The Tariff Concession Instrument No. 0607261, issued on 14 July 2006, exemplifies this process by reducing the duty on certain directional proportional valves from 5% to 0%, following an application by Bluescope Steel Ltd. This instrument came into force on 24 April 2006, the date the application was lodged, and ensures that the rights of importers are positively affected, allowing them to seek duty refunds for imports made since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0607261, made under the Customs Act 1901, applies to the goods specified in the instrument, namely certain directional proportional valves, and the entity that applied for the tariff concession, Bluescope Steel Ltd. The instrument was issued following an application by Bluescope Steel Ltd to the Chief Executive Officer of Customs (CEO) for a tariff concession order (TCO) in respect of the specified goods. The instrument provides for a lower rate of customs duty on these goods, specifically reducing it from 5% to 0%. The instrument is effective as of the date the application was lodged, 24 April 2006, and applies across the Commonwealth of Australia. The CEO must be satisfied that no substitutable goods were produced in Australia in the ordinary course of business for the application to be considered, as outlined in sections 269C, 269D, 269E, and 269F of the Act. The instrument does not impose any liabilities on any person and does not disadvantage any person other than the Commonwealth. Any importers of the specified goods can apply for a refund of duty paid on imports of these goods since the effective date of the TCO, as provided under the Customs (Tariff) Regulations 1993.
Key Provisions
The Tariff Concession Instrument No. 0607261 under the Customs Act 1901 sets out a specific provision for the application of customs duties on certain goods. Section 269F of the Act allows an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) concerning specific goods, which can result in a lower rate of duty being applied (Section 269P). The main operative sections involved in this process include sections 269C, 269B, and 269D, which detail the core criteria for the approval of a TCO application. Specifically, for a TCO application to be considered, it must be demonstrated that no substitutable goods were produced in Australia on the day the application was lodged, and the goods must not fall under the restricted category specified in section 269SJ.
The Act imposes specific obligations on both the applicant and the CEO. For the applicant, the obligation is to ensure that the application is made in good faith and that all required information is provided to substantiate the application's criteria. The CEO, on the other hand, must evaluate the application against the core criteria, consult with relevant stakeholders by publishing a notice in the Gazette (Section 269K), and make a written order if the application meets the criteria. In the case of Instrument TCO No. 0607261, Bluescope Steel Ltd's application was approved, and the CEO issued an order specifying that the certain directional proportional valves would be subject to a 0% duty rate.
Failure to comply with the requirements set out in the Customs Act 1901 and the associated regulations can result in significant consequences. While the explanatory statement does not specify exact penalties for breaches, it is known that non-compliance with customs regulations can lead to both civil and criminal penalties. Civil penalties can include fines and the potential requirement to pay back any duties owed, whereas criminal penalties might involve imprisonment and additional fines. The exact penalties depend on the nature and severity of the breach, as outlined in other relevant sections of the Customs Act and the Customs Regulations 1993.