EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0607964
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 oven air quenches on 05 May 2006.
Instrument
TCO No 0607964 was made on 21 July 2006. It declares that those certain continuous paint line prime oven air quenches 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. 0607964 is taken to have come into force on 05 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. 0607964 was enacted in 2006 as part of the Customs Act 1901. This instrument aims to address the need for a streamlined process to grant tariff concessions on specific imported goods, thereby facilitating smoother trade practices and potentially lowering costs for importers. The instrument was introduced by the Chief Executive Officer of Customs in response to an application by Bluescope Steel Limited for tariff concessions on certain continuous paint line prime oven air quenches, which are subject to a general duty rate of 5%. The Customs Act 1901 provides the legal framework for the creation of Tariff Concession Orders (TCOs), with the CEO having the authority to issue these orders if certain core criteria are met, including the absence of substitutable goods produced in Australia. The primary objective of this legislation is to ensure that the application process for tariff concessions is efficient and transparent while benefiting eligible importers by reducing their customs duties.
Scope and Application
The Tariff Concession Order No. 0607964 under the Customs Act 1901 applies to specific continuous paint line prime oven air quenches as applied for by Bluescope Steel Limited. The instrument is designed to provide a concession on the rate of customs duty for these particular goods, reducing it from the general rate of 5% to free. This applies to the goods specified in the order, and the application of the concession is contingent upon the condition that no substitutable goods are produced in Australia. The instrument’s application is national in scope, as it falls under the purview of the Commonwealth and applies to goods imported into Australia. However, it does not extend to goods specified in section 269SJ of the Customs Act 1901, which lists items ineligible for tariff concessions. The order, which came into effect on the date the application was lodged, 5 May 2006, does not affect any pre-existing rights or liabilities of individuals or entities other than the Commonwealth.
Key Provisions
The main operative sections of this legislation, specifically the Customs Act 1901, include section 269F (2), which allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). Section 269C outlines the core criteria that must be met for an application to be successful, while section 269P(3) details the action the CEO must take if the application meets these criteria. The Tariff Concession Instrument No. 0607964, made under these provisions, declares that certain continuous paint line prime oven air quenches are subject to a concession, with a general rate of duty reduced from 5% to free, effective from the date the application was lodged, 5 May 2006.
Under this Act, the CEO is obligated to evaluate applications for TCOs to determine if they meet the core criteria, specifically if no substitutable goods were produced in Australia at the time the application was made (section 269C). The CEO must also publish a notice in the Gazette inviting submissions from any interested parties regarding the proposed TCO (subsection 269K(1)). In the case of TCO No. 0607964, no submissions were received, and the CEO proceeded to make the order, declaring that the specified goods are subject to the concession as no substitutable goods were being produced in Australia.
Failure to comply with the requirements set out in the Customs Act 1901 can lead to various penalties and consequences. Although the explanatory statement does not specify exact penalties for breaches of the TCO provisions, general penalties under the Customs Act can include fines and imprisonment for serious breaches. The Act also provides for civil penalties, including financial penalties for non-compliance. Importers of the affected goods may also face penalties if they fail to comply with the requirements for claiming a refund of duty under the Customs Act and Regulations.
In summary, the Customs Act 1901 and the associated Tariff Concession Instrument No. 0607964 establish a framework for applying for and granting tariff concessions on specific goods. The CEO has the responsibility to assess applications and make orders based on the core criteria, while importers may benefit from reduced duty rates and the potential for duty refunds. Non-compliance with the Act and the TCO can result in financial penalties and other legal consequences.