EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0607776
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 prime ovens parts on 3 May 2006.
Instrument
TCO No 0607776 was made on 28 July 2006. It declares that those certain prime 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. 0607776 is taken to have come into force on 3 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. 0607776, enacted in 2006, is an instrument made under the Customs Act 1901 to provide tariff concessions for specific goods. The instrument aims to address the need for tariff reductions on certain goods by allowing the Chief Executive Officer of Customs to apply a lower rate of customs duty to goods that are subject to a Tariff Concession Order. The problem this instrument seeks to address is the potential economic disadvantage faced by businesses importing goods for which there are no substitutable Australian-produced alternatives. The policy objective, as implied in the explanatory statement, is to facilitate trade and potentially stimulate economic activity by making imported goods more competitively priced.
The instrument was enacted by the Parliament of Australia and is part of a broader scheme under Part XVA of the Customs Act 1901 that allows for the application of tariff concessions. Bluescope Steel Ltd applied for the tariff concession on certain prime oven parts, and the Chief Executive Officer of Customs made the order after determining that no substitutable goods were produced in Australia. The order provides a tariff rate of 0% for these goods, down from the general rate of 5%, and took effect from the date of the application, 3 May 2006. This instrument ensures that the rights of importers are positively affected, allowing them to apply for duty refunds on imports made since the concession order came into effect.
Scope and Application
The Tariff Concession Instrument No. 0607776 under the Customs Act 1901 applies to specific goods for which an application has been made and approved by the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). The application in this case was made by Bluescope Steel Ltd on 3 May 2006 for certain prime oven parts. The TCO applies to these goods by declaring that they are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, which reduces the rate of duty from 5% to 0%. The Act’s provisions ensure that the TCO does not disadvantage any person or impose liabilities on anyone in relation to actions taken before the order’s registration, but it does allow for the benefit of duty refunds for importers of these goods from the date the TCO is considered to have come into force. The application of this TCO is national in scope, applying across Australia as a Commonwealth matter, and it does not affect any pre-existing rights adversely.
Key Provisions
The primary operative sections of the Customs Act 1901, as applied in Tariff Concession Instrument No. 0607776, concern the application and approval process for Tariff Concession Orders (TCOs). Section 269F allows any person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of specific goods. Section 269C stipulates that the CEO must make a TCO if the application meets the core criteria, which include the absence of substitutable goods being produced in Australia on the date the application was lodged (section 269C in conjunction with section 269P(3)). The CEO must also ensure that the goods in question are not those specified in section 269SJ, which are ineligible for a TCO. Once the CEO is satisfied that the application meets the core criteria, a written order, or TCO, is issued under section 269P(3).
The Act imposes specific obligations on the parties involved in the TCO process. The CEO of Customs is mandated to assess applications against the core criteria outlined in the Act, ensuring that no substitutable goods are produced in Australia at the time of application. The CEO must also publish a notice in the Gazette, inviting any interested parties to submit reasons why the TCO should not be made (subsection 269K(1)). In the case of TCO No. 0607776, no submissions were received in response to this invitation, simplifying the approval process. Importers, once the TCO is in effect, have the right to apply for a refund of duty on goods imported since the date the TCO was taken to have come into force (paragraph 126(1)(r) of the Regulations).
The Act does not explicitly outline specific offences, penalties, or civil/criminal consequences for breaches related to the TCO process. However, it is implied that any non-compliance with the conditions of the TCO or any misleading information provided in the application could lead to legal consequences. The general framework of the Customs Act 1901 and associated regulations would apply to any breaches, potentially involving civil penalties, criminal charges, or other enforcement actions as deemed appropriate by the relevant authorities. While the specific penalties are not detailed in this particular TCO, they would be in line with the broader provisions of the Customs Act 1901 and related legislative instruments.