EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0609139
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 natural gas burners on 26 May 2006.
Instrument
TCO No 0609139 was made on 4 August 2006. It declares that those certain natural gas burners 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. 0609139 is taken to have come into force on 26 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 Parliament of Australia, establishes a framework for customs duties and includes provisions for Tariff Concession Orders (TCOs) under Part XVA. This legislative instrument aims to address the issue of providing relief from customs duties for certain goods that are not produced in Australia, thereby encouraging imports and potentially reducing costs for consumers and businesses. The Tariff Concession Instrument No. 0609139 was created following an application by Bluescope Steel Ltd for certain natural gas burners, which were granted a 0% duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995, effective from 26 May 2006, the date the application was lodged. The policy objective is to ensure that imports of goods not produced domestically are facilitated without imposing additional costs on importers, while also providing a transparent process for public submissions regarding TCO applications.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0609139, applies to any person or entity that imports goods into Australia and seeks to benefit from a reduced rate of customs duty under a Tariff Concession Order (TCO). This Act is administered by the Chief Executive Officer of Customs (CEO), who must determine if an application for a TCO meets the specified criteria, primarily whether there are no substitutable goods produced in Australia. The scope of the legislation extends to the entire Commonwealth of Australia and applies to specific goods, in this case, certain natural gas burners, where the application for tariff concession is valid and no substitutable goods are produced domestically. The instrument specifies that the general duty rate of 5% for these goods is reduced to 0% under the TCO. The Act includes provisions for consultation with interested parties, which in this instance, did not receive any submissions. The TCO is retroactive to the date of the application, ensuring that the rights of importers are protected and that no liabilities are imposed on any individual or entity other than the Commonwealth.
The legislation is subject to further refinement or expansion through subordinate instruments, which may include regulations or additional TCOs as determined by the CEO, but the primary exclusions and exemptions are already outlined within the Act itself. Goods specified in section 269SJ of the Customs Act 1901 are not eligible for tariff concessions, and the process for applying and assessing TCOs is strictly defined, ensuring transparency and fairness in its application.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0609139 involve the making of a Tariff Concession Order (TCO) by the Chief Executive Officer of Customs (CEO) under section 269F of the Customs Act 1901 (section 269F). An application can be made by any person seeking a concession in respect of goods, provided they are not those specified in section 269SJ of the Act. If the CEO determines that the application meets the core criteria in section 269C, which essentially means that no substitutable goods are produced in Australia in the ordinary course of business, the CEO must make a written order (section 269P(3)). The TCO in question, TCO No. 0609139, was made on 4 August 2006, declaring that certain natural gas burners are subject to a concession under item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a zero percent duty rate for these goods.
The Act imposes several obligations on the CEO and applicants for a TCO. The CEO must publish a notice in the Gazette inviting submissions from any interested parties who may have reasons to oppose the TCO, as per subsection 269K(1). The CEO must also ensure that the application meets the core criteria specified in section 269C before making the TCO. Applicants must ensure their application is valid and pertains to goods not listed in section 269SJ. Furthermore, the TCO is deemed to have come into force on the day the application was lodged, as stated in subsection 269S(1).
Any breaches of the obligations outlined in the Act can result in civil or criminal consequences. The specific offences and penalties are not detailed in the explanatory statement, but generally, under the Customs Act 1901, breaches can lead to penalties such as fines or imprisonment, depending on the severity of the breach. The maximum penalties would be in accordance with the relevant sections of the Customs Act 1901 and associated regulations. However, the explanatory statement does not provide specific figures or detailed consequences for non-compliance. It is important to note that the TCO does not impose any liabilities on any person and does not affect the rights of a person as at the date of registration.