EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0608553
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 continuous paint line oven parts on 16 May 2006.
Instrument
TCO No 0608553 was made on 4 August 2006. It declares that those certain continuous paint line oven 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. 0608553 is taken to have come into force on 16 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 Commonwealth Parliament, establishes a framework within which Tariff Concession Orders (TCOs) can be implemented to provide tariff relief on specific goods. The act addresses the problem of ensuring that Australian industries can compete effectively in the global market by providing lower customs duty rates on certain imported goods, provided they meet specific criteria. TCO No. 0608553, introduced in 2006, specifically targets the application made by Bluescope Steel Ltd for tariff concessions on certain continuous paint line oven parts, aiming to reduce the duty from the general rate of 5% to 0%. This concession was granted after it was determined that no substitutable goods were being produced in Australia, aligning with the core criteria outlined in the act. The policy objective is to support Australian industries by reducing the cost of imported goods, thereby enhancing their competitiveness without imposing additional liabilities on importers or affecting their existing rights.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, aimed at applying lower rates of customs duty on specified goods. This Act applies to entities and individuals who seek to import goods that are not currently produced in Australia and for which a tariff concession might be applicable. The scope of the Act is national, operating within the Commonwealth jurisdiction. The application process for a TCO requires satisfying certain core criteria, such as the absence of substitutable goods produced in Australia, and involves a review to ensure that the goods do not fall under the exclusions specified in section 269SJ of the Act. The TCO process includes an opportunity for public consultation, although in the case of TCO No 0608553, no objections were received. The TCO itself is retroactive to the date of application, in this instance 16 May 2006, and it does not affect any existing rights or liabilities incurred prior to its effective date. This legislative framework is further refined and detailed through subordinate instruments and regulations, ensuring its application is precise and comprehensive.
Key Provisions
The Tariff Concession Order (TCO) No. 0608553, made under section 269P of the Customs Act 1901, provides a concession on the customs duty for certain continuous paint line oven parts. This TCO was issued following an application by Bluescope Steel Ltd on 16 May 2006. According to section 269P(3) of the Act, the Chief Executive Officer of Customs (CEO) was required to make a written order if satisfied that the application met the core criteria, which include the condition that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). The TCO declares that the specified oven parts are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, effectively reducing the duty rate from 5% to 0%.
The Act imposes specific obligations on both the CEO and applicants. Under section 269F, a person can apply for a TCO in respect of goods, provided they are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. The CEO, upon receiving an application, must first determine if it meets the core criteria (section 269C), ensuring no substitutable goods were produced in Australia. If the criteria are met, the CEO is mandated to make a TCO (section 269P(3)). Additionally, as per subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties on why the TCO should not be made. In this case, no submissions were received, facilitating the issuance of TCO No. 0608553.
Failure to comply with the requirements of the Customs Act 1901 may lead to various consequences. Although the explanatory statement does not detail specific offences or penalties for breaches related to TCOs, general provisions of the Customs Act may apply. For instance, section 233 imposes penalties for false statements or misrepresentations, which can result in fines or imprisonment. Similarly, section 234 provides for penalties for failure to comply with regulations or directions, which could also attract fines or imprisonment. The Act ensures that these provisions are rigorously enforced to maintain the integrity of the customs duty system.