EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0608003
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 5 May 2006.
Instrument
TCO No 0608003 was made on 14 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. 0608003 is taken to have come into force on 5 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. 0608003 was enacted in 2006 as part of the Customs Act 1901, which outlines the framework for tariff concession orders (TCOs) and their administration. This legislation was introduced to address the issue of ensuring that Australian businesses can access necessary imported goods at reduced tariff rates, provided that such goods are not being produced domestically. The instrument was initiated by Bluescope Steel Ltd's application for tariff concessions on certain prime oven parts, reflecting a need for the Australian market to have access to competitive pricing without being disadvantaged by high customs duties. The policy objective is to facilitate the importation of goods that are not produced in Australia, thereby supporting economic efficiency and competitiveness.
The instrument was enacted by the Chief Executive Officer of Customs following a successful application by Bluescope Steel Ltd, who demonstrated that no substitutable goods were being produced domestically. This led to the issuance of TCO No. 0608003, which effectively reduces the duty on these specific goods from the general rate of 5% to 0%. The legislative process involved public consultation, although no submissions were received in opposition to the concession. The instrument came into force on the date of application, 5 May 2006, without affecting any pre-existing rights or imposing new liabilities on parties other than the Commonwealth. This initiative aims to benefit importers by potentially allowing them to apply for duty refunds on goods imported since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0608003, under the Customs Act 1901, applies to the concession of customs duty rates for specific goods, in this case, certain prime oven parts, as determined by the Chief Executive Officer of Customs. This legislation specifically targets the goods listed in the application by Bluescope Steel Ltd, allowing for a lower rate of customs duty as outlined in Schedule 4 to the Customs Tariff Act 1995. The application of this Instrument is national in scope, operating within the framework of Australian federal law. It does not apply to goods that are specifically excluded under section 269SJ of the Customs Act, which prohibits concession orders for certain specified goods. The Instrument came into effect on 5 May 2006, the date on which the application was lodged, and it does not retroactively affect the rights of any person, except to the benefit of importers who can apply for duty refunds from the commencement date. The CEO is mandated to publish notices inviting public submissions on TCO applications, though in this instance, no objections were received.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0608003 under the Customs Act 1901 (section 269F) pertain to the establishment of tariff concessions for specific goods. When a party applies for a Tariff Concession Order (TCO) in respect of certain goods, such as prime oven parts, the Chief Executive Officer of Customs (CEO) must assess whether the application meets the core criteria set out in section 269C of the Act. If the CEO is satisfied that no substitutable goods were produced in Australia on the day the application was lodged, they must then make a written TCO order, as stipulated in section 269P(3). In this case, the TCO declared that the certain prime oven parts were subject to a 0% duty rate, instead of the general 5% duty rate (section 269S(1)).
The obligations imposed by this Act on the parties involved are primarily centred around the application process for a TCO. The applicant must ensure that their application complies with the core criteria, specifically that no substitutable goods were produced in Australia on the application date (section 269C). The CEO, on the other hand, is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting submissions from any person who believes there are reasons why the TCO should not be made (subsection 269K(1)). The CEO must also make a written TCO order if the application meets the core criteria (section 269P(3)).
Failure to comply with the requirements of the Customs Act 1901 can result in both civil and criminal consequences. While the explanatory statement does not provide specific information about the penalties, breaches of the Act can generally lead to fines, imprisonment, or both, depending on the severity of the offence. The maximum penalties for breaches of the Customs Act 1901 can vary widely, but in some cases, fines can reach up to $220,000 for individuals and $1,100,000 for corporations, along with potential imprisonment terms of up to five years for serious offences. It is important for parties involved to adhere to the provisions and obligations outlined in the Act to avoid any potential legal repercussions.