EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0608223
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 hot air chemical drying ovens on 09 May 2006.
Instrument
TCO No 0608223 was made on 21 July 2006. It declares that those certain continuous paint line hot air chemical drying 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. 0608223 is taken to have come into force on 09 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. 0608223 was enacted under the Customs Act 1901 to address the need for tariff concessions on certain goods, in this case, specific continuous paint line hot air chemical drying ovens, manufactured by Bluescope Steel Limited. This legislative instrument was introduced to provide relief from customs duties for imported goods that are not produced domestically, thus promoting competition and economic efficiency. The instrument was made by the Chief Executive Officer of Customs in accordance with the provisions of the Customs Act 1901, which allows for the application of tariff concessions if no substitutable goods are produced in Australia. The policy objective here is to ensure that the tariff concessions do not disadvantage existing domestic industries and to facilitate the import of goods that are necessary for economic activity but not produced locally. This approach helps to balance the interests of importers and local producers, fostering a more competitive and efficient market.
Scope and Application
The Customs Act 1901, through its Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) which can be applied for by any person seeking a lower rate of customs duty on certain goods. This process is overseen by the Chief Executive Officer of Customs, who is responsible for determining whether an application meets the core criteria, notably the absence of substitutable goods produced in Australia at the time of the application. The scope of the Act extends to any goods for which a TCO can be applied, provided they do not fall under the exclusions listed in section 269SJ. The geographical reach of this legislation is national, as it pertains to customs duty rates applicable across Australia. Additionally, the Act allows for the expansion or restriction of its application through subordinate instruments, thereby providing flexibility in the administration and enforcement of tariff concessions. The Explanatory Statement for Tariff Concession Instrument No. 0608223, for instance, illustrates the application of these principles to a specific case involving Bluescope Steel Limited, where a TCO was issued for certain continuous paint line hot air chemical drying ovens, effectively granting them a duty-free status.
Key Provisions
The main operative sections of this legislation, as outlined in the Customs Act 1901, primarily involve the application and consideration of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (sections 269F, 269C, 269B, 269D, 269E, and 269P(3)). Section 269F allows an individual to apply for a TCO in respect of specific goods, which, if approved, can result in a lower rate of customs duty for those goods. Section 269C stipulates that for an application to meet the core criteria, no substitutable goods must have been produced in Australia in the ordinary course of business on the day the application was lodged. Section 269B defines 'goods produced in Australia,' 'ordinary course of business,' and 'substitutable goods' as per sections 269D, 269E, and 269F respectively. If the CEO is satisfied that the application meets these core criteria, section 269P(3) mandates that the CEO must make a written TCO order.
The obligations and requirements imposed by the Act on the parties governed by it include the CEO's duty to assess the validity of TCO applications (section 269F) and to determine whether they meet the core criteria (section 269C). If the CEO finds that no substitutable goods were produced in Australia in the ordinary course of business, they must make a written TCO order specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from interested parties if they consider there are reasons why the TCO should not be made (subsection 269K(1)). The CEO must also ensure that the TCO does not adversely affect the rights of any person (other than the Commonwealth) in respect of anything done or omitted before the date of registration (subsection 269S(1)).
Regarding offences, penalties, or consequences for breach, the Customs Act 1901 does not explicitly detail specific criminal or civil penalties for breaches related to TCOs. However, the Act ensures that the rights of importers are beneficially affected, and they can apply for a refund of duty on goods imported since the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations). The Act also explicitly states that the TCO does not impose any liabilities on any person (subsection 269S(1)). Any potential breaches or non-compliance with the conditions of the TCO might result in administrative actions or penalties as prescribed by other relevant laws and regulations.