EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0608075
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 worm wheels on 08 May 2006.
Instrument
TCO No 0608075 was made on 21 July 2006. It declares that those certain worm wheels 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 10%. 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. 0608075 is taken to have come into force on 08 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. 0608075 was enacted in 2006 under the Customs Act 1901. This legislation addresses the problem of ensuring that Australian businesses are not unfairly disadvantaged by the imposition of customs duties on goods that can be sourced locally. The enacting body is the Parliament of Australia, and the policy objective is to provide tariff relief to businesses by lowering customs duties on specific goods, thus encouraging local production and reducing the cost burden on businesses that rely on importing these goods. This instrument was introduced to provide tariff concessions to Bluescope Steel Limited for certain worm wheels, which now attract a duty rate of free, as opposed to the general rate of 10%. The instrument came into force on the date the application was lodged, 8 May 2006, and it ensures that the rights of importers are protected, allowing them to apply for a refund of duties paid on these goods since the effective date of the concession.
Scope and Application
The Customs Act 1901, specifically Part XVA, outlines a framework whereby Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This legislative provision applies to any person or entity that seeks to apply for a TCO in relation to certain goods, provided those goods are not listed in section 269SJ of the Act as ineligible for tariff concessions. The geographic reach of this Act is national, impacting the customs duty regime across Australia. The Act applies to industries and transactions involving the importation of goods for which a TCO is sought, thereby directly affecting the rates at which customs duty is levied. The Act includes provisions that may be extended through subordinate instruments to further specify the application and implementation of TCOs. Notably, the Act does not disadvantage any person other than the Commonwealth and does not impose liabilities on any person in respect of actions taken before the registration of a TCO.
Key Provisions
The Tariff Concession Instrument No. 0608075, made under the Customs Act 1901, pertains to the granting of tariff concessions for specific goods. According to section 269F of the Act, an application for a Tariff Concession Order (TCO) can be made to the Chief Executive Officer of Customs (CEO). If the CEO determines that the application is not for goods specified in section 269SJ, they must assess whether the application meets the core criteria outlined in section 269C. The core criteria require that, on the date of the application, no substitutable goods were produced in Australia in the ordinary course of business. This is defined further in sections 269D (goods produced in Australia), 269E (ordinary course of business) and 269F (substitutable goods). If the application meets these criteria, the CEO must issue a written order, which is the TCO, specifying that the goods in question are subject to a prescribed item of Schedule 4 of the Customs Tariff Act 1995.
The obligations under this legislation primarily rest with the CEO, who must review applications against the core criteria and make decisions on whether to issue a TCO. The CEO is also 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, as stipulated in subsection 269K(1) of the Act. In the case of TCO No. 0608075, no submissions were received. The TCO itself provides that certain worm wheels are subject to free duty under item 50 of Schedule 4 of the Tariff, as the CEO was satisfied that no substitutable goods were produced in Australia.
Failure to comply with the requirements of the Customs Act 1901, including the proper application of tariff concession orders, may result in penalties. While the explanatory statement does not detail specific offences, penalties, or consequences for breach, breaches of the Customs Act generally may result in civil or criminal penalties. These can include fines and imprisonment, depending on the severity of the breach and the specific provisions of the Act that are contravened. The maximum penalties are dictated by the relevant sections of the Act and may vary widely depending on the nature and extent of the breach.