EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0607779
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 paint line prime ovens on 03 May 2006.
Instrument
TCO No 0607779 was made on 21 July 2006. It declares that those certain continuous paint line prime ovens 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. 0607779 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs to offer concessions on customs duty rates for certain goods. This legislative instrument was introduced to address the gap in providing tariff relief to importers of goods that are not produced domestically and for which no suitable substitute is available. TCO No. 0607779, made on 21 July 2006, applies to certain continuous paint line prime ovens, granting them a zero-rate customs duty as of 3 May 2006, the date of application by Bluescope Steel Limited. The policy objective behind this concession is to alleviate the financial burden on importers and enhance the competitiveness of Australian industries by reducing the cost of imported goods that have no local alternatives.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0607779, applies to the specific category of goods identified in the instrument, namely certain continuous paint line prime ovens. This instrument extends to the whole of Australia, operating under the Commonwealth's jurisdiction, and is specifically designed to address the tariff concessions for these goods. The legislation is applicable to entities and individuals who import these goods, providing them with a lower rate of customs duty compared to the general rate. This concession is contingent upon the condition that no substitutable goods were produced in Australia at the time of the application, thereby ensuring that the concession benefits the import sector where local production does not exist. The instrument does not impose any new liabilities or disadvantages to persons other than the Commonwealth and does not affect any pre-existing rights. Subordinate instruments may further extend or detail the application of this legislation.
Key Provisions
The Customs Act 1901 (the Act) provides a framework for the administration of customs and excise duties. Section 269F (1) allows any person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of goods. If the CEO is satisfied that the application is valid and meets the criteria, the CEO must make a written order under section 269P(3). This process is detailed in Tariff Concession Instrument No. 0607779, which was made on 21 July 2006, and declares that certain continuous paint line prime ovens are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies. This particular TCO reduces the duty on these goods from 5% to free, effective from the date the application was lodged, which is 03 May 2006.
Entities subject to this legislation, particularly those involved in the importation of the specified goods, must ensure compliance with the terms of the TCO. Importers need to be aware that the TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person for actions taken prior to the effective date of the TCO. Importers will benefit from the reduced duty rate and may apply for a refund of duties paid on the goods imported since the effective date of the TCO. The CEO must publish a notice in the Gazette inviting any person to lodge a submission if they believe the TCO should not be made, though in this case, no submissions were received.
Failure to comply with the requirements of the TCO may result in civil or criminal consequences. The maximum penalties for breaches of the Customs Act 1901 can include substantial fines and, in serious cases, imprisonment. Specifically, under section 269Q of the Act, the CEO may impose a penalty of up to $55,000 for each offence if a person contravenes a TCO. Additionally, under section 273, the CEO may impose penalties for misleading or deceptive conduct, which can also result in significant fines and, in some cases, criminal charges. These penalties serve as a deterrent against non-compliance and ensure that the terms of the TCO are adhered to by all relevant parties.