EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0607766
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 Limited applied for a TCO in respect of certain continuous steel strip paint line scissor type roll carts on 03 May 2006.
Instrument
TCO No 0607766 was made on 21 July 2006. It declares that those certain continuous steel strip paint line scissor type roll carts 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 free.
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. 0607766 is taken to have come into force on 03 May 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. 0607766 was enacted in 2006 under the Customs Act 1901. This legislation was introduced to address the need for a scheme whereby tariff concessions could be granted for specific goods, thereby reducing the customs duty payable on those goods. The instrument is designed to facilitate such concessions by enabling the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) if certain criteria are met, specifically where no substitutable goods are produced in Australia. The policy objective of this instrument is to encourage the importation of goods that are not domestically produced, thereby supporting industries that rely on imported materials or components.
The instrument was enacted by the Parliament of Australia and it provides for the concession to be applied retroactively from the date the application was lodged. In the case of Bluescope Steel Limited’s application for certain continuous steel strip paint line scissor type roll carts, the instrument declares that these goods are subject to a free rate of duty rather than the general rate of 5%. The process included a requirement for public consultation, although no submissions were received in response to the notice published in the Gazette. The instrument ensures that it does not disadvantage any person other than the Commonwealth and does not impose any new liabilities.
Scope and Application
The Customs Act 1901, as amended and detailed in Tariff Concession Instrument No. 0607766, pertains to the application and issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. The Act applies to entities or individuals seeking to import goods that may be subject to a TCO, thereby potentially benefiting from a lower rate of customs duty. The scope of this legislation extends to specific goods, such as the continuous steel strip paint line scissor type roll carts in this instance, and it operates within the broader framework of the Customs Tariff Act 1995. The Act is applicable across the Commonwealth of Australia, ensuring a uniform approach to the tariff concessions across all states and territories. Notably, the Act excludes certain goods from being subject to a TCO, as stipulated in section 269SJ of the Customs Act 1901. The application process requires that no substitutable goods be produced in Australia in the ordinary course of business, as defined by sections 269D, 269E, and 269F. The instrument, which came into force on 03 May 2006, does not affect existing rights or impose any liabilities on persons other than the Commonwealth, and it provides a mechanism for importers to seek duty refunds on eligible goods.
Key Provisions
Section 269F of the Customs Act 1901 provides the primary mechanism by which an application for a Tariff Concession Order (TCO) can be made to the Chief Executive Officer of Customs (CEO). If the applicant, such as Bluescope Steel Limited in this case, submits an application in respect of goods that are not specified in section 269SJ of the Act as ineligible for a TCO, the CEO must then assess whether the application meets the core criteria outlined in section 269C. This requires that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If satisfied, the CEO must issue a written TCO, declaring that the goods in question are subject to a prescribed tariff item, as stated in section 269P(3).
The obligations imposed by the Customs Act 1901 on the CEO under this scheme are quite clear and structured. Once an application is received, the CEO must first determine its validity and whether it pertains to goods specified in section 269SJ. Assuming the application is valid, the CEO must then verify that no substitutable goods were produced in Australia at the time the application was lodged. If the core criteria are met, the CEO must make a written TCO and declare the goods to which a specified tariff item applies. Furthermore, under subsection 269K(1), the CEO is obligated to publish a notice in the Gazette inviting any interested parties to submit submissions regarding the TCO. In this instance, no submissions were received, simplifying the process.
Failure to comply with the provisions of the Customs Act 1901 can lead to several consequences. Firstly, if an entity fails to correctly apply for a TCO or if the CEO does not correctly assess the application according to the criteria, this could result in the inappropriate imposition or non-imposition of customs duties. The Act does not explicitly state penalties for such breaches, but non-compliance could lead to administrative or legal challenges. Moreover, if the CEO issues a TCO that does not meet the statutory criteria, this could be subject to review or revocation by a court, leading to potential financial liabilities for the entity benefiting from the erroneous TCO.